The mid-duty electric vehicle space continues to shrink. Canoo, a seven-year-old electric vehicle startup, filed for Chapter 7 bankruptcy and announced an immediate halt to operations. A press release noted that the liquidation process is overseen by a bankruptcy trustee in the Delaware Bankruptcy Court.
Canoo Inc., formerly listed on the Nasdaq Composite under the symbol GOEV, was a notable player in the electric vehicle market, particularly in the electric freight segment. Despite its partnerships with NASA, the Department of Defense, the U.S. Postal Service, the State of Oklahoma, Walmart and other groups, the company has struggled to obtain the financial support needed to continue operations .
The bankruptcy filing cites failed attempts obtaining financing from the U.S. Department of Energy’s Office of Loan Program, which was a significant factor leading to Canoo’s insolvency. Efforts to obtain capital from foreign sources also did not stave off bankruptcy. Canoo had total liabilities exceeding $164 million against approximately $126 million in assets.
“We would like to thank the company’s employees for their dedication and hard work,” said Tony Aquila, president and CEO. “We know you believed in our company like we did. We are really disappointed that things happened this way. 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 trust in our products and our company. It means a lot to everyone in the company.
Prior to the bankruptcy, Canoo faced numerous challenges that compounded its financial instability. In the last months preceding the deposit, the company on leave its remaining employees and closed its Oklahoma City plant. Despite deals to deliver electric vans to high-profile customers, Canoo has struggled to scale up production and secure wider market adoption. THE company’s third quarter financial reports revealed a continued net loss, with a GAAP net loss of $112 million for the nine months ended September 30, 2024, compared to $273 million for the same period a year ago.
Executive departures and strategic pivots further aggravated operational difficulties. In October, Chief Financial Officer Greg Ethridge and General Counsel Hector Ruiz resigned, replaced by internal promotions. Under the leadership of Aquila, Canoo pivoted its focus from consumer sales to commercial fleets, which involved multiple changes in production strategies and operational realignments. These changes have increased operational costs and decreased investor confidence.
