EV Startup Canoo Debuts First Subscription-Only Vehicle
Former BMW i brand execs reveal a daring first vehicle from their new startup, aimed at offering subscription-based “loft on wheels.”
After decades without new auto industry entrants, EV startups seem to be springing up like weeds. The latest, Canoo, has just revealed the first vehicle it hopes to offer via its unique subscription-only business model. It's a daring vehicle, described as a "loft on wheels," that in some ways resembling a modernist Bahaus take on the electric microbus VW has been teasing for decades... but will it spawn another Tesla, or join the ranks of crashing and burning startups like Faraday Future and NIO?
Considering it has 19 months of fundraising, hiring and design/development work under its belt, Canoo has managed to keep a remarkably low profile. With a reported billion dollars worth of investment commitments, and another $200 million in the works, a mysterious group of private backers from China, Taiwan and Germany are funding the firm, which was previously known as Evelozcity. Formed by former BMW execs after a brief sojourn at Faraday Future, Canoo embodies the huge hopes for a fresh approach to automobility but also the equally-huge questions about how soon it can be made into a viable business.
Canoo's first vehicle is unabashedly unique, from its lower-case name (canoo) to its space-maximizing "post-SUV" one-box design. Even from a company run by the former head of BMW's i brand, Ulrich Kranz, the canoo is a bold statement... and purposefully so. “We promised a truly different approach for EVs," Kranz says, "and our canoo proves that we can deliver on that vision."
Using a completely drive-by-wire steering system, made compliant with regulatory standards by full redundancy, the canoo packs room for seven into a compact car's footprint. The canoo's massive interior space is intended to highlight the firm's new "skateboard" architecture, which Kranz says will ultimately support a wide range of vehicles. Using the same 2170 cylindrical cells pioneered by Tesla, Canoo will fit 80 kWh of nominal storage into its skateboard, resulting in a claimed 250 miles of EPA-rated range and the ability to charge to 80% in 30 minutes.
The uniqueness of Canoo's strategy isn't limited to just the design of its first vehicle, its quirky name or the equally-quirky job titles of its officers (Kranz's title is "In Charge," equivalent to CEO). It plans on offering vehicles, starting with the canoo in 2021, as subscriptions that include everything from insurance to maintenance in a single payment with no fixed term. The company, which has hired a number of former Uber executives, plans on remaining "asset light" with a customer service experience that comes to the subscriber rather than making them come to a fixed retail or service location.
"We want to provide customers a one-stop approach, sign up for membership, the rest is handled by us," Kranz explains. "We bring it to you, we pick it up, we do maintenance, paperwork, connectivity for charging networks, everything." There is an important distinction between Canoo's approach and, say, the "Care by Volvo" model that recently drew scrutiny from California's DMV: "it’s not a timed contract like a lease," Kranz says. "You can drop it or swap it for another car at any time."
This asset-light philosophy also informs Canoo's manufacturing strategy, which seeks to avoid the kinds of challenges that have so publicly haunted Tesla by outsourcing assembly work to a contract manufacturer. "We are lucky that we have experienced auto guys on our team," Kranz tells The Drive. "We have people from Ford, GM and other industry experts and veterans, who know exactly what manufacturing means. We are not underestimating it." He repeatedly emphasized that design for manufacturing was a critical focus for Canoo's design team.
Though Kranz would only say that Canoo was still working on selecting a manufacturing partner, he did say that US assembly would likely take place somewhere with established supply chains and experienced manufacturing workforces, making a brownfield site in the industrial Midwest the most likely location. Supplier and contract manufacturer Magna Steyr reportedly had a letter of intent signed with Evelozcity in May (before the name change to Canoo), and has reportedly been looking for a US facility (not Canadian, due to currency issues), suggesting that it may be a likely partner. Magna builds 11 vehicles worldwide, operates six body shops and five assembly lines, and has manufacturing and development partnerships with electric and autonomous vehicle players like Waymo, Lyft and Beijing Auto.
Though still seeking some $200 million in investment, Kranz says that Canoo has "established a good supply network, with good suppliers," adding that "they look at startups very critically." Provided the cash is forthcoming, Kranz says Canoo plans on progressing from the current "gamma" build which represents "85 to 90 percent of the final design" to a completely-baked design one year from now. From there, it's a question of ramping up industrialization ahead of a planned 2021 launch in Los Angeles.
"We are launching city by city," he says, declining to discuss planned production volumes. "It doesn't make sense to pursue the entire US since 75 percent of the EV market is on the coasts. Once we reach those markets, we will launch in China as well."
Canoo has big plans to deliver the kind of future that everyone seems to expect, but nobody knows quite when it will arrive. Its vehicles are equipped with the sensors needed for a "Level 2+" Advanced Driver Assistance System, and the company will partner with a full autonomous drive developer when the technology matures. Thanks to its flexible skateboard architecture, upgrading sensors and compute for full autonomy will be relatively easy, Kranz says.
In a lot of ways, Canoo feels like a company for an autonomous age that still hasn't quite arrived. Its bi-directional one-box design looks and feels like the kind of robotaxi that Zoox is quietly working on, its lounge-like interior seems made for the autonomous age and its human controls even look like they could be hidden away at any moment. In reality, however, Canoo is likely going to have to deal with a consumer market that isn't much different than the one we live with today.
As a result, it's going to be a fascinating test of how ready consumers really are for new vehicles and business models before autonomy is able to fully transform the user experience. Though it's wisely learning from the mistakes of other innovators and avoiding the biggest challenges facing new automakers, the sheer novelty off its concept and first car will make Canoo a company to watch. If they start to gain real traction, it will be a sign that the market is shifting from mere talk about a reinvention of the auto industry to an actual, real-life transition. It should be a fascinating ride.