Ulrich Kranz, co-founder of California startup Canoo, introduces a new electric vehicle at the launch event of Canoo in Los Angeles, Sept. 24, 2019. A festive launch party for an innovative new electric vehicle from California startup Canoo was held Tuesday in Los Angeles. (Xinhua/Gao Shan)
by Julia Pierrepont III and Michael Tiberi
LOS ANGELES, Sept. 25 (Xinhua) -- At a festive launch party for an innovative new electric vehicle from California startup Canoo, Xinhua sat down with the CEO and founding members of the company for an exclusive interview on Tuesday.
Ulrich Kranz, an automotive engineer-turned-executive who spent 30 years fine-tuning BMW's hybrid and electric car programs, is now the co-founder of the U.S. EV startup seeking to turn the global automotive industry on its ear.
"You need lots of money to launch a car company," Kranz told Xinhua with a chuckle. "Luckily, we found investors willing to invest in our people and our ideas."
Canoo's investors, including some from China, decided to put the pedal to the metal. They liked the company's story, its innovative technology and business model, coupled with the ability to deliver on a significantly reduced product-to-market timeframe.
Canoo founders knew they had the right combination of talent and ideas to bring a game-changing company to the EV industry race.
The company's team used state-of-the-art, virtual reality software simulation tools and 3D goggles to design a brand new electric vehicle in just under 19 months -- considerably less than the standard three-year industry average. Just going from clay models to an interim manufacturing design usually takes 1.5 years. It takes Canoo just ten weeks -- a blink of an eye in car years.
Canoo's "start from scratch" philosophy prompted it to challenge the industry's conventional wisdom on multiple fronts.
"Why not break the mold?" said Richard Kim, who is in charge of the company's design. "We decided to design and engineer based on what consumers want and need, not what we wanted to sell them."
The company's approach resulted in a whole new look and feel to the vehicle, which looks a bit like a Volkswagen bus on steroids.
"It's not just a car to us. We think of it as a loft with furniture, where you can host business meetings, invite your friends, or just hang out in," said Kim.
A choice of multiple "top hats" (car bodies) rest on the same chassis called a "skateboard" that houses all the electric motors and battery arrays that power the wheels, as well as the cooling systems and the steering wheel wiring that enables the steering wheel to be placed in different configurations in different models.
This in turn allows Canoo to maximize the interior space so that its vehicles, with the footprint of a sedan, have the same roomy interior space as an SUV.
But the company's innovation doesn't stop there. It has also scrapped the usual sales and finance model in favor of a subscription-based model in the vein of Netflix or Spotify, which allows consumers to pay significantly reduced monthly installments by spreading the cost over the entire 12-year lifespan of a vehicle.
Also, it bundles insurance and maintenance into the deal, another cost-saving factor, to make it a simple one-stop shopping experience for customers keen to get behind the wheel and purr away.
"We think we can make some significant contributions to the entire global EV industry," said Kranz.
Marketwise, as an American company, Canoo plans to launch first in the United States in 2021, and move into China soon afterwards.
As the largest EV market in the world, China is not a market anyone can afford to ignore, the Canoo founders said.
The Chinese market has been the grand prix for any aspiring EV company following the Chinese government's announcement of an ambitious plan to boost the nation's electric vehicle industry. China sold nearly 1 million electric vehicles in 2018 and is expected to sell 15 million units by 2030.
The Chinese really understand how to grow their market and have made a long-term commitment to EV technology, said Canoo's executives.
"China is such a big EV market, there is room for everyone," Kranz told Xinhua. "But we don't plan our sales strategy country by country, we plan city by city."
Since 18 cities in China account for 75 percent of EV cars sold there, while only eight cities in the United States account for 70 percent of EV sales, that seems like a winning strategy.
China's subsidies helped reduce carbon emissions and offset the EV's higher price tag caused by expensive battery technology. The gambit worked well and China's EV sales revved up by 50.8 percent year on year in 2018.
After its U.S. roll-out, Canoo will start selling its vehicles in China, and it is currently exploring appropriate Chinese partners for parts and manufacturing. Given the uncertainties of the trade war's impact on manufacturing supply chains, Canoo may build a plant in the United States and a plant in China, but those plans have not yet been consolidated.
Though still in the early stages of planning how to customize its vehicles for different markets, the fledgling company also recognizes that consumers in the United States and China have markedly different tastes.
"Typical U.S. EV consumers are looking for something simpler," said one Canoo designer. "But in China, they tend to prefer more luxury and elegance, more bells and whistles."