Canoo revealed that the U.S. Department of Commerce has approved its Oklahoma City facility as a Foreign Trade Zone (FTZ). The company said this will accelerate its made-in-America EV manufacturing strategy, improve unit profitability and enable a faster path to break even.
Canoo said its Oklahoma City facility currently employs more than 100 workers and will support as many as 1,100 manufacturing jobs at full capacity. The company said this FTZ designation allows for the elimination of all customs duties on vehicles sold to customers overseas and for the deferral of customs duties on imported parts used in vehicles sold domestically. The company added it sources more than 90% of its parts from the U.S. and allied nations. Approximately 70% of parts come from North America, and the remaining are from the rest of the world.
For international sales, Canoo said the FTZ will enhance profitability by lowering the vehicle cost by up to 5% on parts imported from the rest of the world. This cost reduction will occur when these made-in-America vehicles are exported to international markets. For domestic sales, Canoo said the FTZ designation improves working capital by millions of dollars by deferring customs, duties and tariffs related to imports from the time of port-of-entry of the parts until the vehicle is delivered to its customers.
“We are proud to announce that we have achieved another important building block in our strategy by creating one of the largest Foreign Trade Zones in the state of Oklahoma,” Tony Aquila, investor, executive chairman and CEO of Canoo, said. “This FTZ will generate economic growth, American jobs, and have a long-term permanent financial benefit to working capital and cost of materials. We want to say a big thank you to the US Department of Commerce, the Port Authority of the Greater Oklahoma City Area, our team, and all our supporters and partners, for guiding us to this important accomplishment. We are committed to expanding our 125-acre manufacturing site as a preferred location to bring more of our supply partners closer to us in the state.”
Canoo said it continues to pursue approval for its remaining manufacturing facilities in Oklahoma and, if approved, the Canoo FTZs are expected to be one of the largest in the state. Canoo’s manufacturing strategy includes ownership of the supply chain where parts are purchased and delivered into Canoo’s manufacturing facilities.
