Many car enthusiasts and experts believe that they are cut out to run their own car company; however, we are repeatedly reminded that running a car company is a very hard job.
Take Carlos Tavares as an example. Until December 2024, he was the CEO of Stellantis (STLA) , which meant that he was responsible for running 14 brands under the same umbrella, including some American labels with massive followings, such as Jeep, Dodge, Ram Trucks and Chrysler.
Though he tried to inject a new sense of life into the automaker, Tavares left amid an ongoing inventory crisis and other issues plaguing the company, including a less-than-stellar relationship with its dealers, customers and other executives.
However, while the Detroit multinational giant’s recovery journey is led by an executive committee led by chairman and Meta board member John Elkann, some automakers are not as lucky.
Canoo filed for Chapter 7 bankruptcy.
The ride is over for EV startup Canoo
In a recent statement, EV startup Canoo revealed that it has filed for Chapter 7 bankruptcy and will “cease operations immediately.”
The struggling EV startup noted that it failed to secure “foreign sources of capital,” and that it was also unable to get any funding from the U.S. Department of Energy’s Loan Program Office.
In a statement, Canoo Chairman and CEO Tony Aquila thanked its workers, as well as companies and government agencies that have contracted with the startup throughout its checkered history.
“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,” Aquila said in a statement.
“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.”
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Canoo owes a lot of people a lot of money
Canoo’s bankruptcy filing just a few weeks after Canoo made some desperate attempts to save whatever little cash it had on hand. Before its Chapter 7, the startup furloughed the remainder of its workers, idled its factory in Oklahoma, and struggled amidst an executive exodus.
Local Oklahoma City outlet The Oklahoman reported back in November 2024 that Canoo furloughed 30 of its OKC-based employees. These workers, most of whom were on the assembly line, were left without paychecks for 12 weeks and healthcare coverage that expired at the end of November.
“Canoo has made the difficult decision to temporarily reduce our workforce in Oklahoma City by furloughing 23% of our factory workers for a period of twelve weeks as part of a broader realignment of our North American operations,” according to a Canoo statement.
“This reduction is a continuation of our efforts to consolidate our U.S. workforce which includes redistributing some of our tenured and skilled employees to our Oklahoma City and Texas facilities as part of our comprehensive plan and supply chain harmonization to prepare the company for the next phase of growth.”
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According to Canoo’s bankruptcy filing, the company has outstanding debts with hundreds of creditors and has more than $164 million in total liabilities.
Despite having contracts with Walmart, the United States Postal Service and NASA’s Artemis program, Canoo struggled to produce more than a handful of its vans. In 2023 alone, it made just $880,000 and produced just 22 electric vans for its customers.
In an October 30 8-K filing with the SEC, Canoo revealed that its cash and cash equivalents had depleted to just $4.51 million, reporting a net loss of $117.6 million through the first half of 2024. However, by November 2024, the startup had just $700,000 on hand.
Then on December 13, it warned that it would not be able to continue operations until the end of the month if it didn’t secure funding over the coming days.
Canoo was once a promising EV startup
Founded in late 2017, Canoo was started by a group of former executives who left another illusive but somehow still alive EV startup: the Chris Brown-endorsed Faraday Future (FFIE) .
The team, led by former Deutsche Bank exec Stefan Krause and former BMW exec Ulrich Kranz, had developed a modular “skateboard” EV platform that could be used for different applications, namely vans.
The year 2022 would be a high point for the startup, as a row of landmark contracts, including NASA, Walmart, the US Postal Service, and the US Army would give the startup some clout.
Related: An fledgling EV startup blew way more than it made on private jet flights
Canoo’s demise comes as its leadership passed through different hands and as it faced multiple lawsuits, including suppliers alleging that the startup had skipped out on payments.
In one lawsuit filed in August 2024, Air Capital Equipment claimed Canoo owes the compressed air system company more than $570,000, which it took out on credit. A few days later, Canoo faced a suit of over $10,600 from another supplier, Saxum Strategic Communications, who claimed failure to make payment.
But even with suppliers taking them to court, Canoo executives apparently knew only one thing to do: keep spending.
In April 2024, it was revealed that in 2023; the same year that Canoo made just $886,000 in revenue, it spent more than $1.7 million in expenses related to the use of a private jet for its CEO.
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