Canoo files for Chapter 7 bankruptcy
Yet another start-up that has to give up: In a statement from Canoo, it is said that it was not possible to secure sufficient funding for the further operation of the company. The last press releases could have made one suspicious: there was still an announcement on the product side that they had achieved the certificates for approval in the UK – otherwise, Canoo only reported financial news. From which something more positive was hoped.
The American electric vehicle start-up Canoo has filed for bankruptcy and ceased its operations. In a statement, the company announced that it was unable to secure enough financial resources to maintain its operations – another setback for the e-mobility sector.
The vans would have stood on a highly flexible platform and enabled a multitude of configurations
Canoo was founded in late 2017 by former employees of the start-up Faraday Future. Their goal was to build their own electric vehicle company. Under the original name Evelozcity, they developed a modular platform for electric vehicles. This platform was intended to allow flexible designs, including vehicles in different shapes and sizes. Under the Canoo brand, the company planned to launch electric cars, minibuses, and transporters – in the long term also in Europe.
A crucial milestone was the IPO in 2021. Through a so-called SPAC deal, Canoo merged with Hennessy Capital Acquisition Corp. and raised around 600 million US dollars. Despite this financial kickstart, success did not materialize. In the years that followed, Canoo only produced a small number of its electric transporters, which were mainly delivered to partners such as the US Postal Service, the US Department of Defense, and NASA for testing purposes.
Nevertheless, the company was unable to build a sustainable demand for its products. Management attempted to attract foreign investors and government grants to keep operations going. Both efforts were unsuccessful. The deal to sell products specific to the UK in Great Britain also failed.
According to the bankruptcy filing reported by TechCrunch, Canoo currently has debts amounting to 164 million US dollars with several hundred creditors. In contrast, the company has assets of only 126 million US dollars.
What does this mean?
Canoo's bankruptcy is another example of the challenges faced by many startups in the fiercely competitive electric vehicle industry. Lack of investments and a difficult market situation have once again brought a young company to its knees.
Sources: Canoo, TechCrunch, Ecomento
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