US electric vehicle manufacturer files for bankruptcy
File photo shows a bankruptcy petition document alongside a gavel, a pen, and a calculator, symbolizing the legal and financial aspects of filing for bankruptcy. (Adobe Stock Photo)
Canoo, a U.S.-based electric vehicle (EV) manufacturer, has filed for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code, the company announced Friday.
Chapter 7 bankruptcy is a legal process that involves the complete liquidation of a company’s assets to repay creditors.
Unlike Chapter 11, which allows companies to restructure and continue operations, Chapter 7 typically signals the end of a business. A bankruptcy trustee, appointed by the court, oversees the sale of the company’s assets and the distribution of the proceeds to creditors.
“The filing, made with the U.S. Bankruptcy Court for the District of Delaware, will result in the federal appointment of a bankruptcy trustee to oversee the liquidation of the company’s assets and the distribution of proceeds to creditors,” Canoo stated in a press release.
Latest bankruptcy in the wave of collapsing EV startups
The bankruptcy comes just weeks after Canoo laid off its remaining workforce and ceased operations at its factory in Oklahoma. Throughout 2024, the company grappled with persistent challenges, including minimal production of its electric vans, a series of leadership departures, and severe financial strain. By mid-November, its cash reserves had dwindled to just $700,000.
Canoo was established in 2017 under the name Evelozcity by Stefan Krause and Ulrich Kranz. Krause, a former chief financial officer at Deutsche Bank, and Kranz, a senior BMW executive, previously worked together at the EV startup Faraday Future before departing due to disagreements with its management team. The duo then launched Canoo, which initially gained recognition for its forward-thinking vehicle designs.
In 2021, the company introduced its first vehicle designed for mass production, followed by the release of its commercial electric van, the MPDV, and a pickup truck later adapted for military applications under the name Light Tactical Vehicle (LTV).
One of Canoo’s final concepts, the American Bulldog, was noted for its futuristic design and spacious interior, though it now appears unlikely to move beyond the prototype stage due to bankruptcy.
Canoo’s downfall highlighted a broader trend of EV startups facing financial difficulties after opting to go public through special purpose acquisition companies (SPACs).
Other notable examples include Electric Last Mile Solutions, which declared bankruptcy in June 2022, as well as Fisker, Lordstown Motors, Proterra, Lion Electric, and Arrival. Canoo acquired some of Arrival’s assets during the latter’s insolvency in 2024, although it remains uncertain whether those assets were effectively utilized.
