By Ben Klayman

DETROIT, (Reuters) –Electric vehicle startup Canoo Inc said Wednesday that it is accelerating production in America and ending the deal with VDL Nedcar Netherlands in order to be its contract manufacturer in Europe.

Canoo shares rose 3% after-hours trading.

According to the Arkansas-based firm, the switch from VDL Nedcar to use overseas was done to decrease supply chain vulnerabilities, reduce shipping costs overseas, increase market speed for the vehicles, and improve efficiency.

Tony Aquila, chief executive of Aquila Constructions stated that the initiatives today were another step towards executing our strategy for reducing risk while increasing certainty. “We concluded that the mission of building in America aligns better with our mission.

Canoo indicated that Oklahoma production is on track to start in 2023. But, Canoo also expects to build electric vehicles next year in Arkansas, rather than using VDL Nedcar.

The company stated that although VDL Nedcar’s deal was over, they were still looking at European partnership possibilities with VDL Groep, the parent Dutch company.

Canoo stated VDL Nedcar would return Canoo’s $30.4 million prepayment, while VDL Groep would buy Canoo stock worth $8.4million.

Canoo now anticipates building 3,000 to 6,096 EVs in Arkansas next year. This is up from its earlier target of just 1,000 overseas. The company also intends to make 14,000-17,000 electric vehicles in 2023 as opposed to its previous target of 15.,000.

According to the company, production targets for 2024 were 40,000-50,000 vehicles and 70,000-80,000 units in 2025. Canoo previously stated that the Oklahoma plant would produce more than 150,000 units per year when it is fully operational.

Canoo had announced that in November, it was adding a Arkansas plant to make small parcel delivery vehicles. But a Canoo spokesperson stated the facility would have the ability to switch between its seven-seat pod-shaped vans, which it calls “lifestyle cars,” and it’s new Arkansas-based vehicle.

Canoo became public in December 2020 through a reverse merge with SPAC, a special-purpose acquisitions company. Aquila, an ex-software executive and Canoo’s largest shareholder, took over as CEO.

Canoo has created a skateboard, which is a platform with low height that combines batteries and motors with chassis components such as wheels and brakes. This allows for a wide range of body styles to be made. Canoo also intends to make a pickup truck.