New Bill Would Ban EV Makers From Receiving Cash From Oklahoma Incentive Program

Oklahoma has faced challenges in recent years attempting to attract electric vehicle (EV) and battery manufacturers with large incentive packages. Now, a state lawmaker has introduced a bill to limit future incentives to EV makers, following the struggles of Canoo, an electric vehicle startup.

Senate Bill 294, introduced by Sen. Adam Pugh (R-Edmond), seeks to prevent electric vehicle manufacturers from receiving payments from the state’s Governor’s Quick Action Closing Fund. This fund is designed to assist Oklahoma in attracting and retaining high-impact economic development projects, with the governor approving cash awards based on recommendations from the Oklahoma Department of Commerce. The bill was prompted by concerns over Canoo’s recent struggles, including its decision to furlough workers and close factories in Oklahoma City and Pryor late last year.

Canoo, a relatively new and unproven startup, received substantial funds from the Quick Action Closing Fund, even as its electric vehicles were still under development. Despite the state’s investments, the company has faced significant setbacks, including the closure of facilities and plans to sell off equipment at an upcoming online auction.

Sen. Pugh argues that Oklahoma needs to reevaluate its approach to attracting EV manufacturers and reconsider its focus on making the state a hub for electric vehicle production. This bill reflects growing skepticism about the long-term viability of such incentives in light of Canoo’s struggles, as well as the state’s previous unsuccessful attempts to bring major EV manufacturers to Oklahoma.

“We’ve chased several companies and we haven’t been successful,” Pugh said. “And there’s been companies here that now are going out of business and employees are affected by that.”

Canoo was initially eligible to receive approximately $100 million through various state and local incentive programs after it announced plans to build electric vehicles in Oklahoma. In 2022, Governor Kevin Stitt pledged up to $15 million from the Governor’s Quick Action Closing Fund to the startup, based on promises that Canoo would build a factory and create hundreds of new jobs in the state. This deal represented the largest incentive award since the Quick Action program was established in 2011 under Governor Mary Fallin.

However, after Canoo failed to meet its performance goals, the state reduced the potential award. The amount was first trimmed to $7.5 million and then further reduced to $4.5 million. Ultimately, Canoo only received $1 million of the funds after it created 100 new jobs in the state by January 2024. The company’s contract with Oklahoma stipulates that if Canoo lays off 80% or more of its workforce within 18 months of receiving the incentive funds, it must repay the money within 30 days.

Given the recent factory closures and worker furloughs in Oklahoma, the Oklahoma Department of Commerce is now reviewing its options regarding the contract and whether the state will enforce the repayment clause or pursue other actions in response to Canoo’s failure to meet its commitments.

“The Department of Commerce has been in contact with Canoo and is having internal discussions about the best way to protect taxpayer dollars,” Chase Horn, a spokesperson for the agency said in a statement.

Pugh said he believes Oklahoma should spend more time supporting and growing other industries that are already an important part of the state’s economy, for example aerospace.

“There’s too many businesses here that I think we’re neglecting that are growing,” Pugh said.

EVinfo.net Condemns Senate Bill 294

EVinfo.net condemns the foolishness of Senate Bill 294. EV companies should not be blocked from Oklahoma. Canoo is a bad example of EV companies. Canoo’s bad management led to it’s failure. This is not a reason to block EV companies from Oklahoma. EV companies could bring many valuable jobs and lots of economic growth to the state.