US EV start-up Canoo files for bankruptcy, immediately ceases operations

Texas based electric vehicle (EV) start-up Canoo announced last week that it was filing for bankruptcy and would immediately cease operations.

Founded in 2017 as Evelozcity, the company was renamed in 2019 with a goal of “reinventing the automotive landscape with bold innovations in design, pioneering technologies, and a unique business model that spans all owners in the full lifecycle of the electric vehicle”.

Canoo had developed an electric ute and van and successfully delivered models to names such as NASA, the US Department of Defence, and the US Postal Service.

Only one vehicle was shipped to the public, however, the Canoo Lifestyle Vehicle, with deliveries beginning towards the end of 2023. The five- or seven-seat people mover was expected to be followed by a so-called lifestyle delivery vehicle, a ute to be called the American Bulldog, as well as a Multi-Purpose Delivery Vehicle.

However, as with a number of EV start-ups over the last few years, Canoo ran into rough waters – posting a multi-million-dollar loss in early 2022 when it also issued a “going concern” warning.

Burning through its capital while also struggling to make inroads into a market that appeared to be momentarily turning its back on new EVs, Canoo continued to try and raise capital to support production.

However, Canoo announced late last week that it had filed a voluntary petition for relief under Chapter 7 of the US Bankruptcy Code after it was unable to secure financial support from the department of energy’s loan program office.

Canoo also revealed that its executives had been in discussions with foreign sources of capital which failed to materialise.

Following the failure of these negotiations, the company’s board decided to file for insolvency.

A federal bankruptcy trustee will now be appointed to oversee the liquidation of the company’s assets and the distribution of proceeds to creditors.

“We would like to thank the company’s employees for their dedication and hard work,” said Tony Aquila, one of the company’s largest investors and Chairman and CEO.

“We know that you believed in our company as we did. We are truly disappointed that things turned out as they did. We would also like to thank NASA, the Department of Defense, The United States Postal Service (“USPS”), the State of Oklahoma, and Walmart for their belief in our products and our company. This means a lot to everyone in the company.”