PRYOR — Plans by electric vehicle start-up Canoo to build a production plant at Mid-America Industrial Park may be delayed by unfavorable economic conditions, the head of the park said Thursday.
Canoo a year ago said it intended to provide at least 1,500 jobs by building a 3-million-plus-square-foot factory at MAIP. Company CEO Tony Aquila said earlier this year that a plant capable of producing 300,000 units annually could be operational in Pryor by 2024.
“It is in delay mode but that’s for a number of reasons,” MAIP Chief Administrative Officer David Stewart said Thursday before a regular meeting of the Oklahoma Ordnance Works Authority, which operates the industrial park. “The whole EV market has taken a significant hit. The stock market is challenged at best.
“Supply-chain issues are big, as they are with all companies, but especially with a start-up that has a new product. Canoo’s goal is to have this 100% made in the US, so that is also delaying the project. Finally , construction costs are through the roof.So, the right financial decision is to wait until these supply-chain issues and construction costs go down and construction labor market builds.”
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Stewart said he’s had light conversations about these issues with Canoo.
“There’s nothing that tells me that Canoo is not going to survive all this,” Stewart said.
Last month, Canoo reported first-quarter losses of $125.4 million while casting “substantial doubt” on its ability to move forward as a company in Oklahoma and Arkansas.
Aquila has said the state of Oklahoma has committed about $300 million in non-diluted financial incentives to support the proposed Oklahoma facility, for which some ground has been cleared for construction.
Canoo set up its headquarters in Bentonville, Arkansas, where it wants to build an advanced manufacturing facility that could be operational late this year or early 2023.
“If you give the construction and supply chain issues six to nine months, I would say that’s reasonable in my estimation,” Stewart said, reiterating that he was speaking from his point of view. “If your goal is to be 100%-American and you can’t get American parts, that’s kind of hard to fill that goal. It’s understandable. It makes sense in my mind from a business point of view that there will be a delay in production.
“My understanding is that the cars are still being built and Bentonville is still under way. So, we are the tail end of the process for building the car in mass production. Because of our position in that cycle, it’s understandable that we would feel the effect of all of those issues compounded.”
Stewart said Thursday he also believes MAIP remains in contention for Project Ocean, widely reported to be a at least a $3 billion Panasonic electric battery plant seeking new operations in either Kansas or Oklahoma.
It is unclear when the company will make a decision.
“We are not assuming they are not coming,” Stewart said. “We are going to go full force and do what we do to show Ocean that this is a great place to be.”
Court challenges were filed this week protesting the legal sufficiency of a referendum petition that asked that a $300 million tax increment financing district go to a vote of the people. Approved by Mayes County commissioners in April, the 12-year TIF would encompass 588 acres inside MAIP to back initiatives such as Project Ocean.
The challenges could be heard in mid-July, though a court date hasn’t been set, an assistant district attorney said. If the petition survives the challenges, it could be placed on the November ballot.
“The fact that we have a couple of thousand people that want to take this to a vote does not mean that the public does not want it and it doesn’t mean it’s not what the communities want,” Stewart said. “It’s democracy at its finest. They are following the process.
“But we are not letting this slow us down in our effort to follow the path that we’ve been following. And that is getting the communities ready, getting the workforce ready and getting the land ready.”
In addition to the proposed Mayes County incentive, Gov. Kevin Stitt this spring signed a bill this spring to provide the firm up to $698 million in rebates based on capital investment and job creation.
Timeline: Canoo electric vehicle startup, from 2017 to Oklahoma’s investment and beyond
June 17, 2021
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