Canoo goes bankrupt, with less than $50,000 left and millions more to go

Another electric vehicle startup is in trouble. Following Lordstown Motors and Fisker’s recent filings for varying degrees of bankruptcy protection, Canoo announced late Friday that it would file for Chapter 7 bankruptcy and cease operations immediately. After years of promises and prototypes, Canoo has officially run out of steam. Even its public website appears to have been shut down, as it now redirects to an investor page, signaling the end.

More: Canoo furloughs 23% of factory workers after selling just 22 cars last year

The company was founded in 2017 as Evelozcity and changed its name to Canoo in 2019, launching a “lifestyle car” prototype. But, as is common with electric vehicle startups, Canoo can’t escape the fatal flaw of burning cash faster than it can raise it.

The company will have $0 in revenue in 2022 and only about $900,000 in 2023, with about a third of that coming from Oklahoma, which purchased three locally built electric vans. Meanwhile, from 2022 to mid-2024, the company lost more than $900 million: about $488 million in 2022, $303 million in 2023, and $118 million in the first half of 2024.

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Financial issues and time off

Canoo disclosed in its bankruptcy filing on Friday that it owed less than 49 creditors, with liabilities ranging from $10 million to $50 million, while claiming it had less than $50,000 in assets.

Kanu’s financial woes are no secret. Just weeks before filing for bankruptcy, the company furloughed employees and shut down operations at its Oklahoma plant — which, according to a former employee, never produced a single vehicle. This is despite earlier promises to create 2,000 jobs in the state.

Uncle Sam (or anyone else) doesn’t help

Kanu had hoped to receive a financial lifeline from a U.S. Department of Energy loan program, but those efforts were unsuccessful. The company then turned to international investors, but without success. Despite high-profile partnerships with NASA, the Department of Defense, the U.S. Postal Service and Walmart, Canoo has been unable to attract the financial backing it needs.

in a statementthe company explained:

“Despite being made in the USA, Canoo has successfully delivered to respected organizations such as NASA, the Department of Defense (“DOD”), the United States Postal Service (“USPS”), the State of Oklahoma, and has agreements with Walmart and other companies Unfortunately, Canoo was unable to obtain financial support from the U.S. Department of Energy’s (“DOE”) Loan Program Office. Recently, the company’s executives were negotiating with overseas capital. In view of the failure of these efforts, the board of directors made the decision to file for bankruptcy. Tough decision.”

Time for reckoning and the million dollar question

Now, the company is moving toward liquidation, with a court-appointed trustee overseeing the process. Canoo will work with the Delaware bankruptcy trustee to manage the remaining assets.

Canoo chairman and CEO (and one of its largest investors) Tony Aquila had some final words for employees:

“We would like to thank our employees for their dedication and hard work. We know you believe in our company as much as we do. We are truly disappointed with how things unfolded.”

More: Canoo made $886,000 in 2023, spent $1.7 million on CEO’s private jet

As for customers who put down a $100 deposit while Canoo still planned to sell electric cars to the public, it’s unclear what will happen to them. However, TechCrunch reports that some people have already started receiving refunds.

Of course, there’s also the pressing question of what will happen to the $1 million Oklahoma State invested in Canoo as part of a broader $100 million performance-based incentive program. As of Friday evening, there was still no response.