Seven-year-old electrical car startup Canoo has filed for chapter and can “stop operations instantly.” The firm is liquidating its property in a Chapter 7 continuing within the Delaware Bankruptcy Court.
The firm stated in a press launch printed late Friday that it was “in discussions with international sources of capital” that proved unsuccessful, and likewise singled out an incapacity to safe funding from the U.S. Department of Energy’s Loan Program Office, which has been on a lending spree within the waning days of the Biden administration.
Canoo stated in its chapter submitting that it owes cash to fewer than 49 collectors, with excellent liabilities totaling between $10 million and $50 million. It claimed to have lower than $50,000 in property.
The chapter submitting comes just some weeks after Canoo furloughed the rest of its employees and idled its manufacturing unit in Oklahoma. The firm struggled all through 2024 to get various of its electrical vans into the fingers of potential prospects, and suffered quite a few government departures. It had simply $700,000 within the financial institution in mid-November.
Canoo is the most recent EV startup to go bankrupt after merging with a particular objective acquisition firm (SPAC) as a shortcut to going public. Electric Last Mile Solutions was the primary in June 2022. But since then, Fisker, Lordstown Motors, Proterra, Lion Electric, and Arrival all filed for various ranges of chapter safety of their numerous dwelling nations. (Canoo purchased Arrival’s property out of insolvency in 2024, although it’s unclear if it ever put any of it to make use of.)
Canoo introduced plans to merge with SPAC Hennessy Capital Acquisition Corp. in August 2020, and went public that following December, elevating round $600 million. In the years because it went public, the corporate made a small variety of its bubbly electrical vans and handed them over to companions — some paying — prepared to trial the autos. The United States Postal Service, Department of Defense, and NASA all have or had Canoo autos.
At one level, the corporate even courted Walmart, which agreed to buy as many as 10,000 EVs from Canoo in 2022. But the deal was primarily non-binding and bore little threat for the retail big.
Canoo was based in late 2017 by a splinter group of executives that have been fed up with the drama surrounding the opposite EV startup the place they labored on the time, Faraday Future. Originally known as Evelozcity, these executives developed a modular electrical car platform that would energy cabins in a number of sizes and shapes, and utilized superior expertise like a steer-by-wire system.
The concepts inside Canoo have been enticing sufficient that the startup at one level was in talks with Apple, which was excited about a possible funding and even acquisition as a method to enhance the tech big’s personal secretive electrical automotive challenge. Former CTO and at one level CEO of Canoo, Ulrich Kranz, went on to assist run Apple’s automotive challenge earlier than it was disbanded in 2024.
But Canoo underwent quite a few pivots after it went public and gained a brand new chairman and CEO in Tony Aquila, who had invested within the firm previous to the merger.
A serial entrepreneur, Aquila instantly refocused Canoo away from promoting to customers and prioritized business fleets. On his watch, Canoo repeatedly modified plans on whether or not it could construct its personal electrical autos or outsource the work. At one level Canoo, introduced it was transferring its headquarters to Bentonville, Arkansas — the house of Walmart — however then by no means actually adopted by way of. Instead, the corporate spent years making an attempt to face up a number of manufacturing services in Oklahoma.
Aquila’s personal monetary agency appeared to learn from his put up atop the corporate. In 2023, Canoo spent double its meager income to Aquila’s agency to pay for the usage of its company jet. Canoo additionally rented workplace area from Aquila’s agency, in line with regulatory filings.
It was additionally Aquila’s agency that stored Canoo alive in latest months. The agency loaned Canoo a couple of million {dollars} to maintain the lights on courting again to October. Those loans have been secured by a “first precedence lien and safety curiosity” on the gear situated on the Canoo’s Oklahoma City facility.
Signs of a chapter have been effervescent up all week. Reddit customers seen that the corporate’s billboard exterior its workplace in Justin, Texas had been taken down. Multiple workers who have been on furlough advised TechCrunch that they acquired official termination notices. Some individuals who had positioned $100 deposits when the corporate was nonetheless planning on promoting to common prospects had began to get refunds.
