Updated: Nov 1, 2022
On July 14th, 2022 Canoo announced they were awarded a contract by the DoD/US Army to supply an electric vehicle for analysis and demonstration. The Press Release noted that the "contract supports the U.S. military's focus to incorporate scalable and adaptable capabilities in operational and garrison environments."
Last week, Canooers contributor Ether covered the non-tactical reasons the Army is testing a Canoo EV with regards to Congress shaping this years National Defense Authorization Act.
I recommend familiarizing yourself with that article as a precursor to this one as the NDAA also plays a part here.
Lets start with a quick review of the relevant information from the request for quote.
The Contract Opportunity:
Notice ID: W56HZV22Q0040a
Requesting Agency: Department of Defense Sub-tier: Department of the Army Office: W4GG HQ US ARMY TACM
Product Service Code: 2355 - COMBAT, ASSAULT, AND TACTICAL VEHICLES, WHEELED
Notice: Army Contracting Command – Detroit Arsenal (ACC-DTA) intends to issue a one-time multiple award contract for up to three (3) one-time awards of a commercial electric vehicle to up to three (3) different vendors.
Contract Award Date: Jul 13, 2022
Contract Award Number: W56HZV-22-P-0019
Base and All Options Value (Total Contract Value): $67500.00
Vehicle to be delivered by: August 31st, 2022
A "garrison environment" is the typical environment found at a military installation/base while an "operational environment" covers everything a solider/platoon might need to consider while performing their duties; from time of day and weather to infrastructure and typical weapons available to the enemy.
According to Michael Sprang, program manager of the Joint Program Office – Joint Light Tactical Vehicle (JLTV) the Canoo EV was purchased, along with a Hummer EV for use in the Electric Light Reconnaissance Vehicle(eLRV) program. "That was primarily just to obtain commercial capability, commercial trucks...There wasn't an agreement for any additional services. We just wanted to get an understanding of what is the best that industry has to offer today." - National Defense Magazine
Since that article was published, the Lordstown Motors Endurance Truck was was awarded the third and final contract for analysis and demonstration. Although it is interesting that Lordstown was awarded the contract after not only the Bid-Due Date but even after the Deliver-By Date.
What is a Light Reconnaissance Vehicle? Well, the original plan for ICE LRVs was for them to scout ahead of the more vulnerable Infantry Squad Vehicles, helping the unarmored transports avoid lethal ambushes. The Army delayed the purpose built LRVs and decided to use heavier JLTVs instead. At some point in time, the program got revitalized and switched focus for them to have an electric powertrain.
The LRVs are supposed to be considered ultralight and seeing as how the Hummer EV weighs a bit over 9000 lbs., roughly 4000 pounds more than a Humvee, I'm not sure it qualifies as ultralight. While the Canoo platform would likely meet the ultralight qualification, it probably lacks the payload needed for multiple combat loaded soldiers.
Historically the Army has had a tendency to write unrealistic requirements that look good on paper and work in simulations only to find out that the industry can't deliver on all the required specifications at the required price point. This time around it would seem the Army wants to see what these platforms are capable of before writing the formal “requirements” for what the Army needs. GMs Ultium skateboard, Canoo's nimble MPP skateboard and Lordstown's in-wheel drive system and hub motor technology all bring something different to the table.
As far as Canoo making a purpose built EV for the army at a future date, it is likely to end up on a beefier MPP for the extra payload and if it needed to be in a truck body then surely it would get a full sized crew cab. We asked our friend at Cyber Owners to use his imagination on what that might look like and he took inspiration from the MPDV styling.
In HR7900, Section 4201, Congress is seemingly going to budget $10M to the eLRV program for FY2023. Initial estimates had getting the program operational by 2025.
Related reading: DoD is searching for better ways to work with startups
The Armed Forces
It's worth noting that the contract is issued by the US Army, but ultimately it was awarded by the DoD since the Army is a branch under them. As Ether pointed out from his review of the NDAA FY23, each of the armed forces will be required to potentially initiate a pilot program with regards to transitioning their non-tactical fleets to electric vehicles. We say potentially because the NDAA has not yet been passed by the Senate and could end up quite different before ending up in front of the President. That being said, we anticipate the general idea of a pilot program will end up in the final bill.
The Armed forces are comprised of the following branches under the direction of the DoD:
Navy / Marine Corps(technically independent but still serves as part of the Navy)
After the NDAA is passed, again assuming the bulk of the text says the same, each branch will only have 180 days to alert the Congressional Committees on Armed Services of their selection of which military installation is to carry out the pilot program. Once the site is selected, they have until January 1st, 2025 to replace ALL covered non-tactical vehicles into
electric vehicles at that facility. Two years might sound like a long time to make that happen, but that also entails figuring out maintenance, charging stations, microgrids and other infrastructure necessary to carry out the pilot program and lots of different vehicles to meet different use cases.
Although we're not sure which ones will bite, we do anticipate additional branches to put Canoo EVs to work for their own electronification plans or pilot programs. For example, lets point to the publication of the "Department of the Navy, Office of the Assistant Secretary of the Navy for Energy, Installations, and Environment. May 2022. Department of the Navy Climate Action 2030. Washington, DC"
To summarize that as briefly as I can, it's the Navy's climate action plan in response to the real threat of climate change and President Biden's Executive Order 14008, Tackling the Climate Crisis at Home and Abroad.
The majority of the Department of the Navy's (DON) focus is on finding ways to eliminate 5 million metric tons of carbon by 2027. Of course, only a smaller portion of this reduction will come from electrifying its applicable fleet vehicles when looking at the department as a whole - but it will certainly make a dent worth the effort, not to mention all the long term benefits EVs have over ICE vehicles.
Some relevant highlights are seen starting on Page 13 under Specific Targets, we read the Navy plans on "acquiring 100 percent zero-emission vehicles by 2035, including 100 percent zero-emission light-duty vehicle acquisitions by 2027". On Page 18, under LOE2: Train and equip for climate resilience, they address their operational emissions, stating that "specific focus areas will be identification and implementation of energy efficiency, demand reduction, and operational improvements; analysis of the impact of future force structure growth, asset mix, and fuel types to support future warfighting requirements; and engagement with industry and other partners to ensure that all relevant technologies, partnerships and contractual structures are rigorously evaluated against the dual goals of combat capability and energy transition.
The DON will continue to optimize its force through hybridization, electrification, alternative lower-carbon fuels, and advanced propulsion solutions for both existing and future tactical platforms in all domains — sea, air, and ground. The DON will ensure that energy performance is formally evaluated and optimized for every weapons system in the acquisitions process. The Department will also investigate options that share power between tactical vehicles and ground generation systems to optimize fuel use in combat operations and reduce the footprint of tactical forces. In all of these efforts, the focus will remain on warfighting efficacy, including fuel demand reduction, extending platform range, and improving resilience and survivability."
The Navy's climate plan isn't unique, there were similar proposals by the other branches of the Armed Forces as well and we've had our eye on the topic for some time. Recall that Tony, speaking of the NASA contract award, mentioned that it opened them up to working with other branches of the Government and he's often hinted at Canoo's technology being "military grade".
"It does open us to engage with other government agencies, which we already are." - Tony Aquila, Canoo's Q1 FY22 Earning Release Q&A
In the above video of Tony speaking in 2021 about the Canoo designed motor, he indicated that "some day" that type of technology was going to be military grade. Now just a year later It would appear that "some day" is at hand.
Authors disclosures: I am long Canoo - I own common shares, warrants and call options.