Is the Future of Electric Trucks Smaller?

The electric truck market is facing significant challenges. The much-anticipated Cybertruck has been labeled a flop, Stellantis recently canceled its Ram 1500 REV, and Ford’s promising F-150 Lightning is also seeing a decline in sales.

Despite these challenges, the U.S. has a deep-rooted love for trucks. So, could the solution to making electric trucks more popular lie in their size—namely, making them smaller?

This is the gamble taken by Telo, a California-based startup founded in 2022. Telo has crafted a compact truck known as the MT1, which comes with a starting price tag of approximately $41,000.

On Tuesday, Telo announced it has successfully closed a $20 million Series A funding round. This round was co-led by renowned designer and Telo co-founder Yves Béhar, along with Marc Tarpenning, a co-founder of Tesla who also serves on Telo’s board. The investment also saw contributions from Salesforce CEO Marc Benioff, as well as early-stage funds such as TO VC, E12 Ventures, and Neo.

In an industry where $20 million is relatively modest, it is noteworthy to compare it with Slate Auto, a company developing its own unique small electric pickup, which has raised over $700 million. Other companies like Fisker Inc., Canoo, and Lordstown Motors have all collapsed after raising similar amounts in the hundreds of millions.

However, Telo is focused on a more targeted approach. “Our hyper-focus is on trucks for urban areas,” said co-founder and CEO Jason Marks during a TechCrunch video call, while touring Telo’s 10,000-square-foot facility in San Carlos, adjacent to the original Tesla headquarters.

Targeting Urban Landscapes

While Telo may eventually target other markets, including small farms, city driving is their main focus. Marks has expressed that he has spent considerable time navigating San Francisco’s streets, highlighting the need for compact vehicles that can make city driving more manageable.

Unlike other manufacturers looking to produce massive quantities of vehicles, Telo has set a modest goal. Currently, it boasts a preorder list of around 12,000 units and an initial production plan of approximately 5,000 MT1s per year through contract manufacturing.

“Our entire ethos is about achieving unit profitability as fast as we can,” Marks explained, positioning Telo differently compared to other automakers that require billion-dollar investments to get into production.

What’s Next for Telo?

The Series A funds will primarily be allocated toward creating the final production-ready model of the MT1, ensuring the vehicle meets U.S. safety standards, and completing crash tests—a crucial element given the MT1’s notably short front end, which has raised safety concerns.

Telo aims to begin deliveries of its first MT1 by the conclusion of 2026.

To optimize resources, Telo plans to maintain a lean workforce of around 25 employees in the short term, utilizing consultants and contractors—many with connections to Tarpenning.

The favorable response to Telo’s Series A round is bolstered by a network of angel investors and smaller companies across the EV landscape. Marks mentioned, “It’s an incredible community that desires to see new mobility architectures succeed.”

Performance and Efficiency

The MT1 is not just about being compact; practicality is paramount. Marks emphasized the focus on “performance per square foot,” highlighting that the MT1 can seat five individuals while including a five-foot bed. This design provides users with extra space compared to competitors like the Rivian R1T and the Ford Maverick, which typically offer shorter beds.

The MT1’s standout feature might be its range—approximately 350 miles on a full charge—which positions it alongside some of the most efficient EVs available today. This longer range would mean less downtime for charging, particularly beneficial for Telo’s urban clientele.

According to Marks, Telo achieved this ambitious range by balancing various factors. While the smaller truck structure inherently enhances efficiency due to reduced weight, the challenge remains in fitting the sizable 106kWh battery within such a compact vehicle without sacrificing functionality.

Although Marks refrained from divulging in-depth specifics about Telo’s battery technologies—as patents are pending—he noted that the MT1 does make trade-offs in areas like acceleration speeds to ensure a well-integrated battery solution.

Challenges and Outlook

If the promised range of the MT1 is realized, it could attract a consumer base eager for such compact and efficient vehicles, drawing parallels to the rising demand for imported Japanese Kei trucks in the U.S.

Though Telo faces significant challenges in the current electric vehicle climate, Marks is optimistic about overcoming these hurdles. He commented, “You’re told, ‘run fast, break things.’ It’s a very Silicon Valley mentality. But an equally important aspect is how to accomplish significant feats with a minimal amount of capital and resources—essentially doing what larger corporations cannot.”

Correction: An earlier version of this article incorrectly identified Marc Tarpenning as a co-founder of Telo. He serves on Telo’s board. This article has been updated.