California Startup Telo Secures $20M for Compact Electric Truck Amid struggles in Major EV Markets
Electric compact trucks appear to be gaining traction amidst challenges faced by larger electric truck models. The Cybertruck’s disappointing performance, Stellantis’ cancellation of the Ram 1500 EV, and declining sales for Ford’s F-150 Lightning are evidence of this trend.
However, the United States remains a significant market for trucks, leading some to question whether a compact solution may be the key to winning over electric truck skeptics. That’s the bet that California-based startup Telo has been making since its establishment in 2022, developing a small yet powerful truck called the MT1 with an approximate starting price of around $41,000.
Investors are backing this strategy: Telo announced a successful $20 million Series A funding round on Tuesday. The round was co-led by designer Yves Béhar and Tesla co-founder Marc Tarpenning, with additional investment from Salesforce CEO Marc Benioff, early-stage funds like TO VC, E12 Ventures, and Neo also participating.
While $20 million may not go far in the world of automotive manufacturing, Telo has more modest goals than some competitors. The company’s focus is on urban centers, with CEO Jason Marks stating that city-dwellers are their primary target market. Marks noted his personal frustration with parking difficulties in San Francisco as the motivation behind this emphasis.
Telo has received pre-orders for approximately 12,000 MT1 units and plans to produce around 5,000 per year via contract manufacturing. The company’s strategy is centered on achieving unit profitability as quickly as possible.
The funding will be utilized for developing the final production-intent version of the MT1, ensuring compliance with U.S. safety standards, and completing crash testing. The latter is crucial, given the MT1’s unique short front end design that has sparked concerns about its safety.
Telo aims to deliver the first MT1 by the end of 2026 while maintaining a lean workforce of around 25 employees. This will be achieved through leveraging consultants and contractors, many of whom have established relationships with co-founder Marc Tarpenning.
The MT1 is not just about size; Telo has focused on making it practical as well. For example, the project prioritizes “performance per square foot,” allowing the truck to seat five while maintaining a five-foot bed, providing an extra half-foot of space compared to some competitors like the Rivian R1T and the Ford Maverick.
The MT1’s impressive range is another key selling point. Telo aims for the truck to achieve around 350 miles on a full battery, making it comparable to some of the most efficient EVs currently available. This extended range will be particularly beneficial for city-dwellers, reducing charging needs and enabling longer trips.
Telo’s battery technology is still patent-pending, but the company has managed to achieve this high range through a combination of factors that prioritize efficiency while maintaining a compact design similar to a Mini Cooper.
The success of imported Japanese Kei trucks in the U.S. indicates that there is a market for vehicles with this form factor. Despite challenges facing EVs in the U.S., Telo believes it can find a niche and compete effectively in this market.
“Our nature is to run fast, break things,” said CEO Jason Marks, alluding to the traditional Silicon Valley approach. “But there’s also another Silicon Valley nature: doing a lot with the smallest amount of capital and the smallest team possible. Doing things that big corporations can’t do.”
