Electric-vehicle startup Telo Trucks has made a huge splash with the announcement of its compact pickup. The reaction has been predictable, with many people ecstatic over the possibility of owning a smaller truck. It turns out that for some people, small trucks are more than just a convenient mode of transportation. They represent a lifestyle that major automakers have ignored for two decades in favor of high-maintenance, full-size pickups. Surprisingly, Telo Trucks has already amassed almost 3,000 reservations, despite having little more than renders and prototypes to show for their project.
But even more surprisingly, Telo Trucks has caught the attention of fleet customers as well.
“There’s this unspoken thing where fleet companies that do work in cities can no longer buy small trucks,” Jason Marks, co-founder and CEO of Telo Trucks, revealed in an exclusive interview with TechCrunch. “They used to love them: They were perfect for these fleet applications for downtown cities, but they don’t exist anymore.”
In order to compensate for the lack of small trucks, some fleet managers have resorted to purchasing neighborhood electric vehicles, essentially glorified golf carts with minimal storage space. However, these low-speed vehicles cannot be used on highways, forcing the fleet to also maintain a full-size pickup to meet all their needs.
But according to Marks, this presents a great opportunity for Telo Trucks to fill a gap in the market. This opportunity has also led to an injection of funding, with an exclusive reveal to TechCrunch that Telo has raised a staggering $5.4 million from Neo and Spero Ventures. The board will also welcome Marc Tarpenning, a Spero venture partner and co-founder of Tesla.
“He’s always been someone that we can call up and say, hey, we’ve got this idea, what do you think? And so when it came time to raise a round, you know, we thought it was very fitting to invite him to join our company,” Marks explained.
The new funds will enable Telo to strengthen relationships with potential fleet customers and develop two fully-functional press vehicles. These vehicles will offer the same look, feel, and finish of the final product, allowing people to experience it firsthand.
Recently, Telo completed the addition of a roll cage on top of its chassis prototype. According to Marks, the team has also been hard at work to overcome various technical challenges, such as ensuring the safety of occupants in crashes with a stubby front end. He teased that they were looking into unique solutions beyond traditional crumple zones.
“They leave a lot of material in that space still,” Marks elaborated. “And that’s been fine when you have an immovable iron block that’s an engine. But when you have an unobtrusive area for crumple, you can do a couple of more unique things that don’t have that leftover material.”
However, the biggest hurdle for any automotive startup is the ramp to production. Marks acknowledged this, stating that Telo is using off-the-shelf components with minor adjustments to reduce manufacturing costs. The company is also considering working with contract manufacturers, likely domestic ones, to produce on a smaller scale of 500 to 5,000 vehicles, rather than the typical 50,000 or 500,000.
“We want to get to profitability at low volumes for specific use cases that we have a niche in, that we’re not competing against a lot of people on,” Marks revealed.
This strategy could help Telo avoid some of the obstacles that other competitors have faced. For example, Rivian, another company targeting both consumers and fleet customers, has a different production ramp. This is because they are focusing on traditional consumer trucks and SUVs that already have established competition.
But Telo’s situation is different because even today’s midsize pickups, like the Ford Ranger and Toyota Tacoma, are still far from being considered compact. This should give Telo some breathing room, at least for the time being, and allow them to navigate through the scaling phase that has tripped up many of their peers.
