telo Raises $20M to Revolutionize City Logistics with Electric Trucks

Challenges in the Electric Truck Market

The adoption of large electric trucks is currently facing obstacles. The Cybertruck has not met expectations, Stellantis discontinued the Ram 1500 REV, and sales of the Ford F-150 Lightning are decreasing.

Despite this, the United States maintains a strong preference for trucks. Could the solution to increasing acceptance of electric trucks lie in a significantly smaller design?

Telo and the MT1

This is the premise upon which California-based startup Telo was founded in 2022. The company has developed a compact truck, the MT1, which carries a starting price of approximately $41,000.

Recently, investors have expressed interest in this approach: Telo announced on Tuesday the completion of a $20 million Series A funding round. This round was jointly led by designer and Telo co-founder Yves Béhar, and Tesla co-founder Marc Tarpenning, who also serves on Telo’s board.

Additional investment was provided by Salesforce CEO Marc Benioff, and early-stage venture capital firms including TO VC, E12 Ventures, and Neo.

Funding and Strategy

In the automotive industry, $20 million represents a relatively modest investment. For comparison, Slate Auto, another company developing a small electric pickup truck, has secured over $700 million in funding.

Other startups, such as Fisker Inc., Canoo, and Lordstown Motors, also raised substantial capital before ultimately facing collapse.

However, Telo possesses more focused objectives and a more precise strategy than these previous ventures.

“Our primary focus is on trucks designed for urban environments,” explained co-founder and CEO Jason Marks during a video interview with TechCrunch, while showcasing Telo’s 10,000-square-foot facility in San Carlos – located adjacent to the original Tesla headquarters.

While Telo may consider expanding into other markets – Marks noted interest from some small farmers – the company prioritizes cities. The CEO stated he has spent considerable time navigating San Francisco streets in search of parking, reinforcing this focus.

Production and Profitability

Telo does not intend to manufacture hundreds of thousands of MT1 units. Currently, they have a preorder list of around 12,000 vehicles, and plan to initially produce approximately 5,000 per year through contract manufacturing.

“Our core philosophy centers on achieving unit profitability as quickly as possible,” Marks stated. “This differentiates us from other automakers who have sought substantial funding to initiate production.”

The Series A funding will be allocated to finalizing the production-ready version of the MT1, ensuring compliance with U.S. safety regulations, and completing crash testing. Marks emphasized the importance of the latter, acknowledging concerns regarding the safety of the truck’s short front end.

Telo anticipates delivering the first MT1 vehicles by the end of 2026.

Lean Operations and Community Support

To maximize the impact of the funding, Marks stated Telo will maintain a “lean” operational structure. This involves limiting the full-time workforce to around 25 employees, while utilizing consultants and contractors – many of whom have established relationships with Tarpenning.

The Series A round also attracted angel investors and smaller companies within the EV sector, further bolstering support. “It’s an exceptional community dedicated to the success of innovative mobility architectures,” Marks commented.

MT1 Features and Performance

The MT1 represents a significant concept, but its value extends beyond its size. Telo has prioritized practicality, focusing on “performance per square foot.”

“We are the only vehicle capable of seating five passengers while offering a five-foot bed,” Marks highlighted. Despite its compact dimensions, the Telo truck provides approximately an extra half-foot of bed space compared to competitors like the Rivian R1T and the Ford Maverick.

Perhaps the most notable feature of the MT1 is its projected range. Marks confidently asserts the truck will achieve around 350 miles on a single charge, rivaling some of the most advanced EVs available.

This range is achieved through a combination of factors. The MT1’s smaller size reduces weight, enhancing efficiency. However, packaging the 106kWh battery pack within such a compact frame presented a challenge.

Marks refrained from providing extensive details, citing pending patent applications. He explained that the MT1 prioritizes range over rapid acceleration, allowing the battery pack to fit within the footprint of a Mini Cooper.

This impressive range could be particularly appealing, especially considering the growing popularity of Japanese Kei trucks in the U.S., demonstrating a demand for vehicles in this form factor.

Overcoming Challenges

Despite current challenges facing EVs in the U.S., Marks remains optimistic about Telo’s prospects.

“The prevailing Silicon Valley mantra is ‘move fast and break things’,” he said. “However, another key principle is maximizing impact with minimal capital and a small team. It’s about achieving what large corporations cannot.”

Correction: This article previously incorrectly identified Marc Tarpenning as a Telo co-founder. He is a member of Telo’s board. The article has been updated.