The electric vehicle startup Canoo files for bankruptcy and halts its operations.
Canoo, an electric vehicle startup that started seven years ago, has declared bankruptcy and will suspend its operations immediately. The company is in the process of liquidating its assets.
The electric vehicle startup Canoo, which began its journey seven years ago, has filed for bankruptcy and will cease operations immediately. The company is in the process of liquidating its assets under Chapter 7 in the Delaware Bankruptcy Court. According to a statement released late last week, Canoo had been in talks with foreign investors to secure capital, but these negotiations were unsuccessful. Additionally, the company highlighted that it had not been able to secure financing through the U.S. Department of Energy's Loan Office, which has been granting loans in the final days of the Biden administration.
In its bankruptcy filing, Canoo revealed that it owes money to hundreds of creditors, with total liabilities exceeding $164 million, while its assets are valued at around $126 million. This decision comes just weeks after the company laid off all its employees and closed its factory in Oklahoma. Throughout 2024, Canoo struggled to deliver more than a few electric vans to potential customers and faced numerous executive departures. Last November, the company reported having just $700,000 in cash.
Canoo joins the list of electric vehicle startups that have declared bankruptcy after merging with a special purpose acquisition company (SPAC) as a shortcut to going public. Electric Last Mile Solutions was the first to do so in June 2022. Since then, other companies such as Fisker, Lordstown Motors, Proterra, Lion Electric, and Arrival have also sought varying levels of bankruptcy protection in their respective countries. Canoo acquired Arrival's assets in 2024, although it is unclear if it was able to utilize them.
The company was first announced in August 2020 as a merger with Hennessy Capital Acquisition Corp. and went public in December of that same year, raising around $600 million. Since then, Canoo managed to manufacture a limited number of its quirky electric vans, which were delivered to partners willing to test the vehicles, such as the U.S. Postal Service, the Department of Defense, and NASA. In 2022, Canoo even sought an agreement with Walmart for the sale of up to 10,000 electric vehicles, although that deal proved largely non-binding for the retail giant.
Founded in late 2017 by a group of disgruntled executives from Faraday Future, it was initially known as Evelozcity. They pushed for the development of a modular platform for electric vehicles capable of powering cabins in various shapes and sizes using advanced technology, such as a drive-by-wire system. Canoo was so appealing that it was in negotiations with Apple for a possible investment or acquisition to boost its own electric automotive project.
Throughout its journey, Canoo underwent several significant changes after going public, and under the leadership of its new president and CEO, Tony Aquila, who had invested in the company before the merger, the strategy shifted toward commercial fleets rather than retail sales. However, the company repeatedly changed its plans regarding manufacturing its own electric vans or outsourcing the process. At one point, Canoo announced it would relocate its headquarters to Bentonville, Arkansas, but failed to realize this initiative.
Recently, signs of bankruptcy became evident, as Reddit users noticed that the company's sign in Justin, Texas had been taken down, and several employees on leave received layoff notifications. Some individuals who had made $100 deposits to purchase vehicles began receiving refunds.