- Canoo was unable to secure production and financing.
- Loud advertising did not find new investors.
- The startup has debts ranging from $10 million to $50 million.
Another electric vehicle startup has failed. Following the recent collapses of Lordstown Motors and Fisker, each of which filed for varying degrees of bankruptcy protection, Canoo announced Friday night that it would file for Chapter 7 bankruptcy and cease operations immediately.
After years of promises and prototypes, Canoo's journey is officially over. Even its public website has been shut down, as it now redirects to an investor page, signaling the startup's demise.
A little history
Founded in 2017 as Evelozcity, the company rebranded to Canoo in 2019, unveiling its prototype “Lifestyle Vehicle.” But, as is so often the case with electric vehicle startups, Canoo couldn’t avoid the fatal mistake of spending money faster than it earned it.
The company generated $2022 in revenue in 0 and only about $2023 in 900, a third of which came from the state of Oklahoma, which purchased three locally-made electric vans. Meanwhile, Canoo accumulated losses of more than $000 million between 2022 and mid-2024: $900 million in 488, $2022 million in 303, and another $2023 million in the first half of 118.
Financial problems and vacations
In its bankruptcy filing on Friday, Canoo showed it owed money to fewer than 49 creditors with liabilities ranging from $10 million to $50 million, while claiming to have less than $50 in assets.
Canoo's financial woes were hardly a secret. Just weeks before filing for bankruptcy, the company laid off workers and shut down its Oklahoma plant — a place that, according to a former employee, had never produced a car — despite earlier promises to create 2000 jobs in the state.
No help from the state (or anyone else)
Canoo desperately hoped to get financial assistance from the US Department of Energy’s loan program, but these attempts were unsuccessful. Then there was a search internationally, but there were no investors there either. Even with well-known partners, including Walmart, Canoo was unable to secure the financial support it so desperately needed.
The company's statement summarizes their efforts:
“Despite being manufactured in the United States, successfully shipping to such respected organizations as NASA, the Department of Defense (“DOD”), the United States Postal Service (“USPS”), the State of Oklahoma, and having agreements with Walmart and others, Canoo has unfortunately been unable to secure financial support from the U.S. Department of Energy’s (“DOE”) Loan Program Office. Company executives have recently been in talks with foreign sources of capital. In light of the fact that these efforts have been unsuccessful, the Board has made the difficult decision to file for bankruptcy.”
Liquidation time and the million dollar question
The company is now moving toward liquidation, with a court-appointed trustee overseeing the process. Canoo will work with a Delaware bankruptcy trustee to manage the remaining assets.
Tony Aquila, Chairman and CEO of Canoo (and one of its largest investors), had some final words for employees:
"We want to thank the company's employees for their dedication and hard work. We know you believed in our company, as did we. We are sincerely disappointed that things turned out the way they did."
As for customers who made $100 deposits when Canoo was still planning to sell electric cars to the public, it’s unclear what will happen to them, but TechCrunch reports that some have already started receiving refunds.
And, of course, there is the burning question of what will happen to the $1 million invested by the state of Oklahoma in Canoo as part of a broader $100 million incentive package.