Canoo's bankruptcy and asset sale have left many wondering what happened to this electric vehicle (EV) manufacturer. In August 2023, Canoo announced that it was filing for Chapter 11 bankruptcy protection in the United States.
The company's financial struggles were well-documented, with a significant decline in revenue and a large cash burn rate. Canoo's cash reserves dwindled to just $10 million by the end of 2022, leaving it with limited options to stay afloat.
As a result of the bankruptcy, Canoo's assets are being sold off to pay off creditors. The sale includes the company's intellectual property, manufacturing equipment, and other assets.
Related reading: Canoo Stock Symbol
Canoo Bankruptcy
Canoo filed for Chapter 7 bankruptcy and ceased operations in December 2024, just a few months after furloughing 82 employees.
The company liquidated its assets and was overseen by a bankruptcy administrator. Canoo also furloughed its remaining employees in January 2025, sending them on a "mandatory unpaid break" through the end of the year.
The bankruptcy case was a Chapter 7 proceeding in the Delaware Bankruptcy Court. Canoo's CEO was allowed to buy the company's assets, despite objections from Harbinger, an electric truck maker that accused Canoo of hiding assets during the bankruptcy sale.
The sale of Canoo's assets to its CEO was approved by the judge overseeing the case, despite Harbinger's allegations. Suppliers are already filing lawsuits over unpaid bills, with Kistler Instrument Corp. seeking $56,000 in damages.
The liquidation of Canoo's assets will likely have ripple effects across its supply chain and partnerships, including a nonbinding agreement with Walmart to purchase thousands of EVs.
Financial Issues
Canoo's financial issues began with a Chapter 7 bankruptcy filing, which led to the company ceasing operations immediately. This was announced in December 2024.
The company had already furloughed 82 employees, both salaried and hourly, prior to the bankruptcy filing. This was a significant blow to the company's workforce.
Broaden your view: Merger Filing Fee Modernization Act of 2021
A mysterious investor from London intervened in the bankruptcy proceedings, objecting to the sale of Canoo's assets to its CEO. The investor claimed the process was "flawed."
Harbinger, an electric trucking company, also filed an objection to the sale, alleging that Canoo had hidden assets during the bankruptcy sale. This potentially threw a wrench into the two-month-old bankruptcy case.
Canoo had acquired Arrival, Inc. in March 2024, but Harbinger claimed that some of those assets weren't disclosed and that the bankruptcy administrator failed to get an independent valuation of Canoo's financials.
Judge Rules CEO Can Buy Bankrupt EV Startup's Assets
A mysterious investor out of London has asked a bankruptcy judge in Delaware to stop the sale of EV startup Canoo's assets to its CEO, calling it a “flawed” process.
The judge overseeing the case, however, has approved the sale of Canoo's assets to its CEO.
Harbinger, an electric trucking company, has filed an objection to the sale, potentially throwing a wrench into the two-month-old bankruptcy case.
The objection is based on allegations that Canoo hid assets during the bankruptcy sale, including acquiring Arrival, Inc. in March 2024 without disclosing some of those assets.
The bankruptcy administrator failed to get an independent valuation of Canoo's financials, giving the CEO an unfair advantage in the bankruptcy proceedings.
Aquila, the former CEO, is set to buy Canoo's assets despite the objections, which could have significant implications for the beleaguered EV industry.
My Dream Electric Car Is Gone
My dream electric car is gone. Canoo, the electric vehicle startup, has filed for bankruptcy and ceased operations.
The company had a unique design approach, focusing on what future users would actually need. They described it as a "loft on wheels" and used a "Skateboard" design, where all the car's workings are squished into the bottom and the body is stuck on top.
This design allowed for weight savings and paved the way for autonomous driving. Canoo's "steer-by-wire" system eliminated the need for a mechanical connection between the steering wheel and the wheels.
Many people thought the Canoo was ugly, but I thought it was a great design, based on a heritage going back to Buckminster Fuller's Dymaxion Car through the Volkswagen bus and Amory Lovins's skateboard.
The company had made significant progress, with Apple spending billions and not getting as far as Canoo did. Canoo had even furloughed 82 employees before filing for bankruptcy.
The Canoo's design was truly innovative, and it's a shame to see it go. The company's liquidation of assets in a Chapter 7 proceeding is a testament to the financial struggles it faced.
Asset Hiding and Mismanagement
Canoo's bankruptcy case has taken a dramatic turn, with EV truck maker Harbinger accusing the company of hiding assets in the sale of its assets to its CEO.
Harbinger has filed an objection to the sale, potentially throwing a wrench into the two-month-old bankruptcy case. This move is a significant development in the already complex and murky situation.
Worth a look: Harbinger Knowledge Products
Canoo acquired Arrival, Inc. in March 2024, but allegedly didn't disclose some of those assets, which Harbinger claims is a serious issue. The bankruptcy administrator failed to get an independent valuation of Canoo's financials, which is a major concern.
Harbinger also alleges that Canoo falsely claimed assets it didn't possess, although the company didn't go into specifics in the brief. The situation is indeed murky, and it's unclear how this will play out.
Impact on Employees and Operations
Canoo's employees have been severely impacted by the company's struggles. The startup has placed its remaining employees on a "mandatory unpaid break" through at least the end of the year.
This break affects 82 employees who were furloughed, leaving them without pay. Canoo's decision to furlough these workers is a result of the company's efforts to scrape for cash.
The company's factory in Oklahoma has also been idled, further disrupting operations. Suppliers are already feeling the effects, with Kistler Instrument Corp. seeking $56,000 in damages over unpaid bills.
The halt to operations at Canoo's factory is not expected to be an issue for Walmart, as the deal between the two companies was a nonbinding agreement.
On a similar theme: What Happens If You Break a Lease
Frequently Asked Questions
Has Canoo sold any vehicles?
Yes, Canoo has sold vehicles, but at a very slow pace, with only 19 deliveries to customers reported in nearly two years of production. Despite starting production in 2021, the company's sales have been limited.
Featured Images: pexels.com
