Canoo ends EV production deal with VDL Nedcar; merges with VDL Groep

Canoo, an electric vehicle startup, has announced dissolution of its deal as a contract manufacturer in Europe with a Dutch automotive producing firm VDL Nedcar. Ahead of this, Canoo will enter into a new contract with another Dutch based car manufacturer VDL Groep to produce vehicles in the U.S.

Tony Aquila, CEO of Canoo, stated that the company expresses gratitude to VDL Nedcare for its manufacturing contract but for its future, aims to invest in hi-tech producing communities like America, to create employment and innovation.

Tony added that the new venture has received remarkable support from Arkansas and Oklahoma which will speed up the achievement of SOP with less risks attached to the firm.

As per credible sources, followed by the disintegration, VDL Nedcare will return Canoo’s $30.4 million advance money. As Canoo’s new partner, VDL Groep will reportedly buy stock worth $8.4 million of the company.

For the uninitiated, the news regarding Canoo’s decisions came after the firm announced its relocation of headquarters and manufacturing facility to Bentonville, Arkansas where production of 25,000 new vehicles will take place.  

As per reports, Oklahoma has agreed to $300 million financial incentives to assist Canoo’s manufacturing and facilities. Canoo is building a mega micro factory in Oklahoma along with series of delivery vehicles and pickup trucks which will facilitate the delivery of vehicles omitting the 25% tax which would have been levied if they were produced in Europe.

Furthermore, Canoo will be calling for federal government contracts after signing $1 trillion infrastructure bill which also includes Buy American Act. The act limits the use of non-domestic supplies, specifies manufacturing of final product in the U.S.

It has been stated that Canoo’s new manufacturing partner will minimize supply chain vulnerabilities, create advanced jobs, accelerate marketing and save money by eliminating tariffs.

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