Canoo Files for Bankruptcy Amid Mounting Challenges
Seven-year-old electric vehicle manufacturer Canoo has filed for bankruptcy, halting all operations. The company has initiated a Chapter 7 liquidation process in the Delaware Bankruptcy Court, marking the end of its tumultuous journey in the competitive EV market.

Seven-year-old electric vehicle manufacturer Canoo has filed for bankruptcy, halting all operations. The company has initiated a Chapter 7 liquidation process in the Delaware Bankruptcy Court, marking the end of its tumultuous journey in the competitive EV market.
In a press release issued late Friday, Canoo stated that attempts to secure funding from "foreign sources of capital" had failed. It also cited the inability to obtain financial support from the U.S. Department of Energy’s Loan Program Office, which has recently ramped up lending activity. These setbacks left the company unable to sustain its operations.
According to the bankruptcy filing, Canoo owes over $164 million to various creditors while holding approximately $126 million in assets. The company’s struggles became evident in late 2024 when it furloughed employees and suspended operations at its Oklahoma facility. By mid-November, its cash reserves had dwindled to a mere $700,000.
Shifting Strategies and Missed Opportunities
Founded in 2017 by a group of executives who had previously worked at Faraday Future, Canoo initially garnered attention for its modular electric vehicle platform and innovative technologies like steer-by-wire systems. The company, originally named Evelozcity, positioned itself as a pioneer in customizable EV designs. However, after going public in 2020 through a merger with Hennessy Capital Acquisition Corp., the company struggled to maintain its footing.
Despite raising around $600 million during its public debut, Canoo faced significant hurdles. While entities like the United States Postal Service, Department of Defense, and NASA trialed its vehicles, the company failed to achieve substantial production or sales figures. A non-binding agreement with Walmart in 2022 to purchase up to 10,000 vehicles brought hope but did not materialize into firm orders.
Under the leadership of Tony Aquila, who became chairman and CEO post-merger, Canoo shifted its focus from consumer sales to commercial fleets. Yet, repeated changes in strategy—ranging from manufacturing plans to relocating headquarters—contributed to the company’s instability. Efforts to establish manufacturing facilities in Oklahoma were fraught with delays, and the company’s financial difficulties deepened.
Financial Missteps and Industry Trends
Regulatory filings revealed financial arrangements that raised questions. In 2023, Canoo paid Aquila’s financial firm twice its annual revenue for the use of a corporate jet and rented office space from the same firm. Loans from Aquila’s firm, secured against equipment at the Oklahoma facility, kept Canoo afloat temporarily, but the measures proved insufficient.
The bankruptcy of Canoo adds to a growing list of EV startups that have collapsed after taking the SPAC route to go public. Companies such as Electric Last Mile Solutions, Lordstown Motors, Proterra, and Arrival have faced similar fates. Interestingly, Canoo had acquired assets from Arrival out of insolvency in 2024, though it remains unclear how these were utilized.
Signs of the End
The final days of Canoo were marked by visible signs of decline. The company’s billboard outside its office in Justin, Texas, was removed, and furloughed employees received termination notices. Meanwhile, early customers who placed deposits began receiving refunds, signaling the company’s inability to deliver on its promises.
As Canoo closes its doors, its demise underscores the challenges faced by EV startups in a rapidly evolving and fiercely competitive market.