EV startup Canoo has filed for bankruptcy. Here’s a look at what happened and what’s next.
Canoo announced the Chapter 7 filing Friday evening after the markets closed and said it would “cease operations” immediately.
In a Chapter 7 bankruptcy a company’s assets are sold to pay creditors. Although some companies survive bankruptcies, those are usually Chapter 11 reorganizations.
In the case of a Chapter 7 bankruptcy, a company usually ceases to exist once the proceedings are completed.
In terms of what’s next, although Canoo didn’t inform stockholders, Canoo contracted with worldwide auction site Bid It Up well ahead of the bankruptcy filing.
Earlier in the week, before the filing, Bid It Up announced an auction of some of Canoo’s assets for February 6.
Bid It Up calls the listed Canoo equipment, “former assets.” The list includes things like laser cutters, forklifts and fabrication equipment.
Related: More Canoo coverage
The Chapter 7 filing was made with the U.S. Bankruptcy Court for Delaware and will result in the federal appointment of a bankruptcy trustee to oversee the liquidation. Canoo said it’s team will collaborate closely with the trustee.
Canoo has also pulled down its customer website.
For several days the site was dead before the canoo.com URL was eventually re-directed to the investors’ website, which at the time of this post’s publication was still active.
In a last ditch attempt at survival, Canoo announced a1-for-20 reverse stock split in December to pump its stock price back up above the NASDAQ’s minimum requirement of $1 per share.
Two days earlier it announced furloughs and said it would idle its factory, saying at the time it was focused on finalizing securing additional capital.
Canoo hasn’t revealed how many EVs it built in 2024 but based on publicly available news releases, comments, photos and videos, it appears doubtful Canoo ever got its Oklahoma assembly line up and running. Or if parts of the line were working, the site never reached mass production.
CEO Tony Aquila said in 2023 that the company was ramping up for a 20,000 unit run rate and that the plant could break even at 40,000 units.
Investors Criticize Canoo For Cost Of CEO’s Private Jet
In April of 2024 concerns among some investors grew when a SEC filing showed Canoo paid the CEO’s other company $4.1 million to use the family’s private jet and pay it’s related fees for business travel in 2022 and 2023. Business Insider was among the news outlets that did stories on Aquila’s private jet bills.
Canoo had also gone silent on announcing new customer orders. Back in December of 2023, Canoo claimed its order book was worth over $3 billion dollars and previously showed off high profile customers that included Walmart.
Aquila, who was one of Canoo’s biggest investors, said in a news release announcing the bankruptcy, “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. 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.”
Canoo said in its bankruptcy filing that it has more than $164 million in liabilities and claimed about $126 million in assets.
While a final production number wasn’t available at the time of this post, it’s probably a safe guess to estimate that Canoo built less than 50 vehicles over its lifespan, some of which did make it into the hands of customers such as the State of Oklahoma and the U.S. Postal Service.
The last time Canoo announced any official production numbers was in April 2024, when it announced it had built 22 EVs in 2023, with 17 of those built in the fourth quarter of that year.
There’s a good chance Canoo stockholders won’t receive anything from the liquidation, or if they do, it will be pennies on the dollar.