When electric vehicle startup Telo Trucks announced its light pickup truck, people predictably went wild. Some executives see light trucks as more than just a convenience, they're a lifestyle, but major automakers have largely ignored them for the past two decades in pursuit of higher-margin full-size pickups. With just a few renderings and early prototypes, the company secured nearly 3,000 reservations for him.
But over the past few months, something unexpected has happened. Fleet customers were also hooked.
Jason Marks, co-founder and CEO of Telo Truck, told TechCrunch that “there is a tacit understanding that urban fleet companies are no longer able to buy light trucks.” . “They used to love this product. These products were great for fleet applications for downtown cities, but they don't exist anymore.”
Some fleet managers are resorting to purchasing electric vehicles locally. Electric cars are basically luxury golf carts that can be equipped with a small bed in the back. But these slow vehicles can't be used on highways, so you also need to buy and maintain a full-size pickup truck so you can do all the tasks you need to do.
“This is a unique opportunity because there is a huge hole in the market,” Marks said. “We want to continue to accommodate our early users, and we want to combine that with delivering to larger fleet customers at the same time.”
That opportunity gives you more money. TechCrunch has exclusively learned that Telo has raised a $5.4 round from Neo and Spero Ventures. Spero Venture's partner and Tesla co-founder Marc Tarpenning will join the board of directors.
“He was someone we could always call and say, 'Here's an idea, what do you think?' So when it came time to raise money, we were very excited to invite him to join our company.” We thought it was appropriate,” Marks said.
Marks said the new funding will help Telo deepen its relationships with potential fleet customers and develop two “fully functional press vehicles” with the look, feel, fit and finish of the final product. Said to be helpful. “People can ride it, drive it, and really feel it.”
Telo recently finished adding a roll cage on top of its chassis prototype. Marks said the team is working on a variety of technical challenges, including how vehicles with bulky front ends can protect occupants in a crash. He didn't have any details to share, but hinted they were considering something beyond the crash zone.
Telo recently completed work on a prototype roll cage. Image credit: Telo Trucks
“They still have a lot of material in that space,” he said. “And that was fine when you had a stationary hunk of steel called an engine. But if you had an inconspicuous place to wrinkle it, you could do some more unique things without using leftovers.”
For auto startups, ramping up to production is probably the biggest hurdle. Marks acknowledged that and said that to reduce manufacturing costs, Telo uses off-the-shelf components with some modifications. The company is also considering partnering with a contract manufacturer, perhaps in the country, to produce smaller volumes of 500 to 5,000 units, rather than 50,000 or 500,000 units.
“We want to be profitable in small quantities for specific use cases in niche areas where we're not competing with a lot of people,” Marks said.
Low-volume production helps avoid some of the challenges faced by other entrants. Rivian is particularly similar in that it goes after both consumer and fleet customers, but its production growth is fundamentally different. Part of that is because it's going after consumer trucks and SUVs, a segment where competition is already established.
Telo doesn't have the same concerns. Even today's midsize pickup trucks like the Ford Ranger and Toyota Tacoma are far from compact, giving the Telo a headroom that other vehicles may not enjoy. The company won't dominate the market forever, but it may be enough time to overcome the scaling phase that has stumbled many of its peers.