- The decision by Canoo not to seek protection from creditors but to enter liquidation suggests there was no confidence among the board or investors that the company could restructure its balance sheet amid the darkening financial climate in the U.S. for EVs.
Another electric vehicle startup to emerge from the pandemic-era boom just bit the dust.
Right before EV critic Donald Trump takes office as the next President, Texas-based Canoo informed shareholders on Friday it was ceasing all operations and filing for bankruptcy.
The decision not to seek protection from creditors but rather enter Chapter 7 liquidation suggests there was no confidence on the part of the board or investors that it should or even could attempt to restructure its balance sheet amid the darkening financial climate in the U.S. for EVs.
The startup justified the drastic move by citing failed talks to secure a last-moment government lifeline—the same kind of Department of Energy loan just extended to larger peer Rivian, sparking controversy. Talks to raise capital abroad also failed.
“In light of the fact that these efforts were unsuccessful, the Board has made the difficult decision to file for insolvency,” it said in a statemen on Friday.
Once considered a technology that would revolutionize America’s roads, the outlook for EVs—while still bright—has dimmed greatly now that Trump is taking office.
He’s expected to quickly put an end to the $7,500 federal tax credit introduced under the Biden administration to spur demand for the technology.
Founded by two top BMW execs, Canoo aimed to incorporate blockchain technology
The latest company to fold after names like Lordstown Motors in 2023 and Fisker in 2024, Canoo began its life as EVelozcity. Founded in 2017 by two former top BMW executives, it was an early entrant boasting top talent at the helm.
Stefan Krause, a former finance chief for German premium carmaker who briefly held hopes for the CEO job before defecting to Deutsche Bank, struck out on his own in the heady days of the EV technology. He partnered with the engineering mind trusted to head up BMW’s prestigious megacity car project that ultimately spawned BMW’s i3 subcompact.
Despite their credentials and buzzy predictions of using blockchain distributed ledger technology to manage vehicle subscriptions, the two struggled to capitalize on their head start and eventually left the company altogether.
While Canoo did convince investors to pony up billions in loss-absorbing equity, going public at the end of 2020 via a special purpose acquisition company, everything went downhill from there.
Even a promising order from Walmart couldn’t save the startup. By the time it announced plans to liquidate, it had delivered only about a dozen vehicles in total and never made it to series production.