The EV startup apocalypse has claimed another brand. Canoo, a startup that built a handful of adorable electric vans, has filed for bankruptcy, and it’s looking like it won’t be coming back from the dead. With a small number of prototypes already in the hands of the USPS and NASA, among others, Canoo made it further than some startups, but it didn’t make it far enough.
The electric vehicle gold rush of the 2010s saw the dawn of many startups. For every Rivian, there were several Fiskers, with intriguing plans that ultimately weren’t sustainable. Canoo was one of the more interesting EV startups of this age, because its vision was to deliver a cab-forward electric van before Volkswagen announced the ID.Buzz.
With a capsule silhouette, a skateboard platform including low-profile composite transverse leaf springs, a friendly face, the promise of seating for up to seven, and a planned pickup truck variant, the Canoo Lifestyle Vehicle quickly became a proposed electric vehicle that people wanted to see succeed.
Canoo lasted long enough to secure contracts with the likes of NASA and Walmart, and produce more than 100 prototypes, but on Jan. 17, the music stopped. According to a press release, Canoo failed to secure the funding to keep going, halted operations, and announced that it was filing for Chapter 7 bankruptcy.
While several high-profile automotive companies like Wheel Pros doing business as Hoonigan have declared insolvency over the past year, most of these filed for Chapter 11 bankruptcy protection, which allows for continued limited operations and debt restructuring in order to stay in business. Sure, some changes will happen under Chapter 11, but generally, companies carry on.
However, Canoo has filed for Chapter 7 bankruptcy, which is an entirely different kettle of fish. Instead of permitting restructuring, Chapter 7 means a company’s gone, bust, ready to be picked over so that any proceeds from selling assets can be used to pay back creditors. Put simply, new Morimoto headlight components and Rotiform wheels will continue to be made, but you won’t see any new Canoo vans out and about.
So, what went wrong? Well, aside from the obvious fact that making cars is an extremely challenging business, several things failed to go Canoo’s way. One elephant in the room is capital allocation, with Automotive News reporting that Canoo spent more on its CEO’s private jet in 2023 than it took in as revenue.
The company spent $1.7 million reimbursing Aquila Family Ventures, an entity owned and operated by CEO Tony Aquila, for the usage of a private aircraft for purposes related to the business, Canoo said in its annual 10-Q filed with the SEC on Tuesday. The figure represents about twice the $886,000 the company brought in as revenue in 2023.
That’s not a great look for an EV startup that had seen numerous funding challenges, many of which simply came from a shift in environment. After all, Canoo was founded in the near-zero interest rate tech bull market of the late 2010s. Unfortunately, before production could start, markets shifted. From the brief economic dip of 2020 to the higher interest rates that followed, investors grew cold on funding EV startups, putting hopefuls in a pinch. Canoo did manage to raise funding by going public via SPAC in September 2020, but this alternative reverse-merger method of listing a company has proven to result in an iffy hit rate.
Following going public, Canoo ended up experiencing a revolving door of executives, a series of proposed facility moves, and other inefficiencies that may have set the company back. At the end of the day, it all ended up being a bit too much, which leads us to the present day, with the company filing for Chapter 7 bankruptcy and claiming less than $50,000 in assets. Considering the company was sued last year for allegedly missing a $10,600 payment, it’s quite plausible the value of assets on hand is low indeed.
You can’t help but feel bad for the workers who toiled in an attempt to make Canoo’s products successful, along with amateur retail investors who held Canoo in their Robinhood accounts, genuinely believing in the company. If the claim of having so few assets is true, anyone owned money by Canoo is likely largely out of luck.
At the end of the day, making cars is hard, and few of these electric vehicle startups had good chances for success. From the enormous amount of money required to develop a vehicle from scratch to the trials and tribulations of manufacturing hell and the low margins vehicles command compared to other goods, the carmaking business isn’t for everyone. What’ll happen to the Canoo prototypes roving America? I guess we’ll just have to wait and see.
(Photo credits: Canoo)
Support our mission of championing car culture by becoming an Official Autopian Member.
-
Electric Startup Canoo Sued For Allegedly Missing $10,600 Payment
-
Canoo EV Postal Service Van Spied In Real Life With One Big Surprise
-
EV Startup Canoo Announces Deal With Post Office To Provide A Comically Small Number Of Vans
-
Fisker Bankruptcy Shows It Owes Millions To Adobe, Google, And NBC Universal
-
Fisker Left Behind Two Clay Models, Hazardous Waste, And Lots Of Trash, Says Landlord
Please send tips about cool car things to tips@theautopian.com. You could even win a prize!
They should have merged with Elio, Lordstown Motors and Aptera. They could have built a three wheeled glass bubble with solar panels and in-hub motors. Their company moto could have been: “DUMBER TOGETHER”
I’m sure we’ll see YouTube videos where some guy bought parts and prototypes at an auction and is trying to get it road worthy.
I wonder how many of the Vans made it out into the wild. I look forward to stumbling on one on Facebook marketplace in 20 years
I’ve been searching for a VIN for one for a long time so I could do a bit of research and try to find out. Unfortunately since I believe they were all still on Manufacturer plates there will be no registration records.
These would have to be one of the ultimate orphan cars. Naturally I want one.
Extremely frustrating to see such a good idea so badly mismanaged. It might have failed anyway, but there will always be a “what if it were managed properly”. This, Bollinger, and Rivian were the 3 interesting EV truck (and for Canoo–van) concepts. Now I guess it’s just Rivian.
Bollinger is still in business, they were acquired by Mullen. The B4 medium duty truck is in production now.
I assume the situation is tenuous so keep watching.
pickup is not in production with no plans to revive it for now, sadly
Their Oklahoma facility is just a few miles from me. If they hold an auction there, I will probably go and check it out if I can manage it.
I’m looking forward to the upcoming article about ol’ Tony being arrested for fraud or travelling across the world in a large musical instrument case…
It does say “related to the business” so I wouldn’t be completely surprised if he was doing a last-ditch roadshow to investors around the world, begging China for money, etc.
OTOH, I worked at a small company that had no business owning a jet. When they finally folded and got bought out, the logbook showed that 80% of all flight time was taking the board on beach vacations (a board of over 20…in a company that would normally have a board of 5-7). The remainder were valid business reasons BUT none of the locations was more than a 4-hour drive, so there was no reason to use a jet for that. Or even a turboprop. Or even an airplane at all. Granted, this was pre-smartphone days so travel time was a lot more lost productivity than it is now.
Still, losing some money on Canoo, I would like to see the full story.
I had a little fun and dumped about $300 into them (stock) about a year ago once they hit Penny Stock territory. The gamble was that if any of the corporate partners fully materialized, the upside would outweigh the loss. Oh, well, I took my lumps.
First — and only — penny stock gamble I’ve ever made in over 30 years of investing.
Now let’s hope Rivian doesn’t end up in the same bucket because I have a lot more than that at stake…
I made the same gamble. And I don’t regret it. The product was interesting, the potential was there, and they really did seem to be trying to make a go of it, rather than being an obvious vaporware scam. The upside could have been really good.
I think Rivian is past the point of penny stock status. Their trucks seem popular enough (I see them EVERYWHERE in the PNW), and I know they have a lot of their own valuable IP (particularly around EV controls and motor units). Don’t forget they have their delivery van IP too. I see the Amazon Rivians everywhere. There’s also the VW ties now.
Time will tell, but I would say they’re at the point now where if they were circling the drain, there’s enough value there for a larger player to swoop in and buy them, if only for the IP. I’ve always thought Rivian would be particularly attractive to Ford.
Renault Espace / Matra P18 , the China only Buick GL8 , first gen General Motors U platform Dustbusters, Toyota Previa, all manage to be one-box-ish but probably not inherently deadly. I’d settle for a more smoothed out Previa.