It is highly symbolic that the upcoming departure from the political scene of Joseph Biden was marked by a sad event for the American electric vehicle industry. The startup Canoo, which planned to produce electric vehicles for various purposes on a unified platform, announced its bankruptcy and cessation of activity.
Image Source: Canoo
It was after Biden came to power four years ago that an investment boom in the development and production of electric vehicles began in the United States. The goals set by the outgoing US administration in the transition to electric vehicles were very ambitious, they promised to support consumers with purchase subsidies, and billions of dollars were planned to be spent on developing charging infrastructure and subsidizing the production of electric vehicles in the United States.
Founded in 2017, Canoo hoped to establish serial production of commercial and other electric vehicles on a modular platform that allows the use of add-ons for various purposes. In fact, all models of this brand, to one degree or another, resembled minivans in their outlines, only in some cases they could act as commercial vans, and in others serve as a pickup truck or minibus. At a certain point, Apple was even interested in purchasing Canoo, inspired by the design and versatility of the company’s solutions. Former Canoo CEO Ulrich Kranz at one time even helped Apple work on creating its own electric car until the company abandoned the idea in 2024.
In 2020, Canoo entered the stock market through a SPAC transaction and managed to raise about $600 million for development. The company’s new management has focused on the idea of using commercial electric vehicles, and preliminary agreements have been concluded with the US Postal Service, the Pentagon and NASA, to which Canoo has provided several electric vehicles for use. In 2022, Canoo even agreed with the retail chain Walmart to provide 10,000 electric vans, but the cooperation did not develop.
By 2024, things were getting worse for Canoo, although it acquired the production assets of another bankrupt startup, Arrival. By the end of the year, the company had laid off all employees at its Oklahoma facility, and several executives left during the year. By mid-November, Canoo had no more than $700,000 left in its accounts. Bankruptcy documents say its debt obligations range from $10 million to $50 million, the number of creditors reaches 49, and the value of its own assets does not exceed $50,000. In such conditions, it cannot can neither continue operations nor pay off creditors. For this reason, Canoo decided to begin bankruptcy proceedings. Prepayments for electric vehicles that customers were expecting to receive will be refunded to them in accordance with the law.