Photo: Canoo
When Canoo announced VDL Nedcar as its manufacturing supplier on June 17, 2021, there was something fishy about all the changes the company was going through. Many of its founders left the company, and the plans were radically different than the original ones. Business Insider tried to discover why and the answer could be Tony Aquila.
Canoo’s CEO may be pushing talent away from the company and fundamentally changing what it stood for. Former and current employees also told Business Insider that he is trying to run the company as if it was involved in the software industry. Curiously, that mixes two business models: one that killed the first iteration of Aptera, and another that put Tesla in its current troubled situation.
Regarding Aptera, Chris Anthony and Steve Fambro conceived the company to produce the most energy-efficient car ever sold. New investors kicked them out of the project and tried to turn it into something else. The company went bankrupt shortly after that. Luckily, Anthony and Fambro managed to buy back the assets, and are now trying to resurrect the idea.
In Tesla's case, running the company as if it was making something software-related proved to be a mistake. There’s no such thing as a beta vehicle unless it is for validation tests. If you put a beta in mass production, all the defects that were not detected with proper testing will show up and carry a heavy financial burden with them. Tesla’s recent recalls and its belief that OTA (over-the-air) updates will fix everything is proving to be a costly slip.
Aquila’s previous experience was with a software company called Solera. He became executive chairman and CEO at Canoo as the company’s leading investor. That’s similar to what Elon Musk did with Tesla. Even ousting the true founders of Canoo followed the same script. Aquila told Business Insider that the people who do not pursue what he wants for the company will either be asked to leave or will leave on their own.
Former and current Canoo workers are worried. They told Business Insider they do not believe the company will be able to produce as many vehicles as it said it would in 2022. The plan was to manufacture between 3,000 and 6,000 EVs in Q4, but that included having VDL Nedcar as a partner. The deal has allegedly been dropped.
In June 2021, Canoo said it would have a Phase 1 in manufacturing, in which VDL Nedcar would help, and a Phase 2, when its own factory in Oklahoma would take care of pumping out these vehicles. It seems Canoo decided its Oklahoma factory will be enough. The problem is that it has no executives with experience in car manufacturing.
Canoo was originally a company that would not sell its cars. They would be marketed by subscription, meaning that people would pay a fee to use them. Such a fee would include registering, servicing, insurance, and even charging. Riversimple will follow precisely this business model.
As unusual as that may sound, it frees customers from concerns with depreciation, battery pack life, and reliability, to name a few. All of them rest upon the vehicle owner – in this case, the manufacturer. Canoo gave up on all that to sell the EVs and adopt the same business plan companies like Ford, GM, or Tesla have. Curiously, Aquila told Business Insider he did not want to make a new Ford or GM.
The market has not reacted well to the changes in the company. Share prices have dropped. If it ever fails, as Aptera once did, Canoo’s founders may try to repurchase it as Anthony and Fambro did with Aptera. If it sells vehicles following Tesla’s steps, it may find itself learning the hard way what mass production really represents. At this point, it can dodge these traps. It would be wise to learn from other people’s mistakes.
Regarding Aptera, Chris Anthony and Steve Fambro conceived the company to produce the most energy-efficient car ever sold. New investors kicked them out of the project and tried to turn it into something else. The company went bankrupt shortly after that. Luckily, Anthony and Fambro managed to buy back the assets, and are now trying to resurrect the idea.
In Tesla's case, running the company as if it was making something software-related proved to be a mistake. There’s no such thing as a beta vehicle unless it is for validation tests. If you put a beta in mass production, all the defects that were not detected with proper testing will show up and carry a heavy financial burden with them. Tesla’s recent recalls and its belief that OTA (over-the-air) updates will fix everything is proving to be a costly slip.
Aquila’s previous experience was with a software company called Solera. He became executive chairman and CEO at Canoo as the company’s leading investor. That’s similar to what Elon Musk did with Tesla. Even ousting the true founders of Canoo followed the same script. Aquila told Business Insider that the people who do not pursue what he wants for the company will either be asked to leave or will leave on their own.
Former and current Canoo workers are worried. They told Business Insider they do not believe the company will be able to produce as many vehicles as it said it would in 2022. The plan was to manufacture between 3,000 and 6,000 EVs in Q4, but that included having VDL Nedcar as a partner. The deal has allegedly been dropped.
In June 2021, Canoo said it would have a Phase 1 in manufacturing, in which VDL Nedcar would help, and a Phase 2, when its own factory in Oklahoma would take care of pumping out these vehicles. It seems Canoo decided its Oklahoma factory will be enough. The problem is that it has no executives with experience in car manufacturing.
Canoo was originally a company that would not sell its cars. They would be marketed by subscription, meaning that people would pay a fee to use them. Such a fee would include registering, servicing, insurance, and even charging. Riversimple will follow precisely this business model.
As unusual as that may sound, it frees customers from concerns with depreciation, battery pack life, and reliability, to name a few. All of them rest upon the vehicle owner – in this case, the manufacturer. Canoo gave up on all that to sell the EVs and adopt the same business plan companies like Ford, GM, or Tesla have. Curiously, Aquila told Business Insider he did not want to make a new Ford or GM.
The market has not reacted well to the changes in the company. Share prices have dropped. If it ever fails, as Aptera once did, Canoo’s founders may try to repurchase it as Anthony and Fambro did with Aptera. If it sells vehicles following Tesla’s steps, it may find itself learning the hard way what mass production really represents. At this point, it can dodge these traps. It would be wise to learn from other people’s mistakes.
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