EV Startup Canoo Files for Bankruptcy: A Shocking End to Innovative Electric Vehicle Operations
Canoo, a seven-year-old electric vehicle (EV) startup, has officially filed for bankruptcy and will cease operations immediately. The company is liquidating its assets through a Chapter 7 proceeding in the Delaware Bankruptcy Court.
Reasons Behind Canoo’s Bankruptcy Filing
In a press release issued late Friday, Canoo stated that it had been exploring options with foreign investors, but these discussions did not yield the necessary funds. The company also highlighted its failure to secure financing from the U.S. Department of Energy’s Loan Program Office, which has been active in lending during the final days of the Biden administration.
Financial Overview
- Total liabilities: Over $164 million
- Total assets: Approximately $126 million
- Number of creditors: Hundreds
The bankruptcy filing follows a series of troubling developments for Canoo, including the furlough of its remaining workforce and the shutdown of its Oklahoma factory. Throughout 2024, the company struggled to deliver its electric vans and experienced numerous executive departures, leaving it with just $700,000 in the bank as of mid-November.
Canoo’s Challenges in the EV Market
Canoo is not the only EV startup facing financial difficulties. After merging with a Special Purpose Acquisition Company (SPAC) as a quick route to going public, several others have also gone bankrupt. Notable companies include:
- Electric Last Mile Solutions (June 2022)
- Fisker
- Lordstown Motors
- Proterra
- Lion Electric
- Arrival
Interestingly, Canoo acquired Arrival’s assets out of insolvency in 2024, although it remains unclear if any of those assets were utilized effectively.
Brief History of Canoo
Canoo was founded in late 2017 by a group of executives who left Faraday Future due to internal conflicts. Initially named Evelozcity, the startup aimed to develop a modular electric vehicle platform capable of adapting to various cabin designs and utilized innovative technologies, including a steer-by-wire system.
At one point, Canoo attracted interest from tech giant Apple, which considered investing in or acquiring the startup to enhance its own electric car initiatives. Ulrich Kranz, a former CTO and CEO of Canoo, later contributed to Apple’s car project before it was disbanded in 2024.
Leadership Changes and Strategic Shifts
After going public, Canoo underwent significant changes in leadership, with Tony Aquila taking over as chairman and CEO. His focus shifted the company’s strategy from targeting consumers to emphasizing commercial fleet sales. However, Canoo’s plans were often inconsistent, leading to questions about whether it would manufacture its own vehicles or outsource production.
Financial Struggles and Controversies
Aquila’s financial firm played a crucial role in keeping Canoo afloat in recent months by providing loans secured against the company’s equipment. Regulatory filings revealed that Canoo paid far more than its revenue for services from Aquila’s firm, raising concerns about potential conflicts of interest.
Signs of Trouble Prior to Bankruptcy
Leading up to the bankruptcy, indications of financial distress were evident. Observant Reddit users noted that the company’s billboard in Justin, Texas was removed, while furloughed employees reported receiving official termination notices. Customers who had placed deposits for vehicles began receiving refunds.
This story will continue to be updated with new information regarding Canoo’s financial situation, including details about its creditors, assets, and liabilities.
For more information on the electric vehicle market and related updates, visit U.S. Department of Energy and stay informed about the latest trends in the automotive industry.
