Oklahoma Gov. Kevin Stitt is seeking to tune up expectations for one of the leading state economies for oil and gas with a plan to bring in electric vehicle manufacturers to what he calls the “most business-friendly state.”
Through a decade-old incentive program known as the Quick Action Closing Fund, Stitt has pledged to offer Los Angeles-based EV manufacturer Canoo $15 million over the next four years in an effort to usher in new high-paying jobs and diversify Oklahoma’s economy.
Although the Sooner State is the fourth-largest oil producer in the nation, Stitt told the Washington Examiner the investment compares to “getting a chance to land Ford Motor Company back at the turn of the century.”
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“People have a misconception of Oklahoma, that we’re just oil and gas — which, we love our oil and gas, and we’ll have an honest conversation with you about how that’s so important. But we’re leaning into alternatives as well,” Stitt said.
When Canoo announced Pryor, Oklahoma, as the site for its U.S. manufacturing facility in June 2021, the plan was estimated to create 1,500 high-paying jobs for that facility alone. So far, Canoo has said it plans to create 700 new engineering and tech positions in Tulsa and Oklahoma City as part of its long-term goals.
Stitt told the Washington Examiner the investment was a “no-brainer” for Oklahoma, adding the state has “more charging stations per capita than any other state.”
“We’re leaning heavily into hydrogen, carbon recapture. We’ve got tremendous universities here that focus on the energy transition. So we’ve had honest conversations for decades about what does that look like? How do we let the free market work? And at the same time, having a robust reliable electricity grid,” Stitt added.
Established in 2011, the state’s $300 million Quick Action Fund was formed as a financial source available to the governor to attract high-impact businesses. The $15 million commitment is nearly five times the previous record of $3 million that was dispersed twice, once in 2013 to General Electric for a research center and once more in 2015 to Commercial Metals to build a mill in Durant.
“We certainly have protections in place to protect the taxpayer and make sure that there’s no corporate welfare or we’re not giving away something for free without performance first,” Stitt said.
Canoo can claim $3 million of the Quick Action funding after it spends at least $48 million and completes 10% construction of the Oklahoma-based plant. The company said the state has committed a total package of incentives valued at $300 million to create new jobs in the state, though many details are undisclosed due to a confidentiality agreement obtained by the Frontier.
The Oklahoma governor also waived competitive bidding for the commitment offered to Canoo. Still, Stitt’s administration has defended the decision, with his communications team saying it will ultimately make the state more attractive to businesses.
“While open, competitive procurement is generally the favored approach, a more focused procurement strategy to achieve an economic initiative is entirely justifiable,” said Robert Alfert, a Florida Bar board-certified attorney in construction law, when asked whether there were any risks to waiving competitive bidding.
“Whether it is a ‘net positive’ turns entirely on how thorough of a job Oklahoma did in determining that this foray into EV makes economic sense for the state and whether Canoo is the right vehicle — no pun intended — to advance this initiative,” Alfert told the Washington Examiner.
Stitt also said state officials are in talks with another “electric vehicle industry supplier,” noting that the state’s “dead center” location in the United States makes it a prime location for distribution purposes. “Hopefully, we’ll be able to land and make that announcement in a couple weeks,” Stitt said.
Canoo announced on Wednesday it was selected by NASA to build vehicles to carry astronauts to the launchpad for Artemis missions to the moon and Mars, a competitive deal valued at $147,855.
@NASA’s new Crew Transportation Vehicles are based on Canoo’s LV model – a future-forward all-electric vehicle, designed from a clean sheet to maximize cabin space, utility and productivity on a small footprint.
We think long term, and long range – to the moon… #Canoo2TheMoon pic.twitter.com/EdDBvvIX5a
— Canoo (@canoo) April 13, 2022
NASA’s selection of Canoo was seen as a marginal win for the company’s brand recognition due to a series of setbacks from within, as more than 50 employees have left the company in the years following the departure of its chief executive officer and other integral company leaders last year, Bloomberg reported.
Oklahoma has agreed to buy up to 1,000 EVs from the company over the next five years, each ranging between $35,000 to $50,000 per vehicle.
Canoo’s plant in Pryor is not slated for completion until 2024, meaning some of the state’s purchased vehicles will likely be made at Canoo’s upcoming factory in northwest Arkansas. The company previously aimed to open the factory in 2023.
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“Most likely, we’ll give them some of the vehicles out of northwest Arkansas, but not a lot,” Canoo’s CEO Tony Aquila said in a recent interview.
Commercial production of Canoo’s standard EVs is still on track to commence later this year at the company’s Bentonville, Arkansas, plant.
