By Jane Lanhee Lee
OAKLAND, Calif (Reuters) - AYRO Inc, a maker of low-speed electric vehicles (EVs) used on college campuses and resorts, on Tuesday said it will work with EV maker Karma Automotive LLC to produce over 20,000 electric delivery vehicles through 2023.
Karma is a U.S. subsidiary of one of China's biggest auto parts manufacturers, Wangxiang Group, which created the firm after buying the assets of defunct startup Fisker Automotive.
The contract is valued at over $300 million and Karma will help design, engineer and manufacture the vehicles in its southern California factory near Los Angeles, the firms said in a joint statement.
The deal comes as delivery fleet operators face regulatory pressure in California and other states to buy electric vehicles, while coronavirus lockdowns have led to a surge in package and restaurant deliveries.
AYRO Chief Executive Officer Rod Keller said restaurants increasingly need their own EV delivery fleets as more sales are made via deliveries through firms such as DoorDash, GrubHub Inc, Uber Eats from Uber Technologies Inc.
"Restaurants are concerned about losing control of the experience and about the margin impact," Keller said.
Austin, Texas-based AYRO is developing an advisory council that it hopes will include representatives from restaurant chains Panera Bread (NASDAQ:PNRA) Company, Jimmy John's and Firehouse Subs to advise on what they would like to see in the configuration of delivery vehicles, Keller said.
Reuters was not immediately able to reach the restaurant chains for comment.
(This story corrects 7th paragraph after company clarifies former comment to say the advisory council is in development and the restaurant chains haven't been formally engaged yet)