Electric vehicle startup Canoo has announced its decision to cease operations and file for Chapter 7 bankruptcy. The company made the filing with the U.S. Bankruptcy Court for Delaware, marking the beginning of the liquidation process. A Bankruptcy Trustee will now oversee the sale of Canoo’s assets.
The move follows months of unsuccessful attempts to secure additional funding. In a press release issued on Friday, Canoo confirmed its immediate shutdown, bringing an abrupt end to the company’s ambitious efforts in the EV space.
Leadership Addresses the Collapse
Canoo Chairman and CEO Tony Aquila expressed gratitude to employees, customers, and partners in a statement. “We would like to thank the company’s employees for their dedication and hard work. We know that you believed in our company as we did. We are truly disappointed that things turned out as they did,” said Aquila. He also extended thanks to organizations that had shown faith in Canoo, including NASA, the Department of Defense, the U.S. Postal Service (USPS), the State of Oklahoma, and Walmart.
A Promising Start, a Rocky End
Canoo had started its journey with ambitious goals, securing high-profile contracts with NASA, Walmart, USPS, and others. The company also built a factory in Oklahoma and aimed to establish itself as a key player in the growing EV market.
However, Canoo struggled to maintain momentum. Despite its efforts to secure funding through the U.S. Department of Energy’s Loan Programs Office and foreign investors, the startup was unable to stabilize its finances.
Restructuring Efforts Fell Short
In an attempt to salvage the business, Canoo pursued aggressive restructuring last year. Approximately 200 employees were asked to relocate to facilities in Texas or Oklahoma. Additionally, the company parted ways with Chief Technology Officer Sohel Merchant, one of its founding members. Despite these efforts, Canoo failed to reverse its fortunes.
What Went Wrong?
The bankruptcy highlights the challenges of building an EV startup in a highly competitive market. While Canoo’s partnerships and contracts showcased promise, its inability to secure long-term funding ultimately sealed its fate.
This marks the end of Canoo’s journey in the EV space, raising questions about the sustainability of smaller players in a rapidly consolidating industry.
