USA / UK – Earlier this month, American light-duty EV manufacturer, Canoo Inc based in Justin, Texas filed for Chapter 7 bankruptcy* and ceased operations immediately. According to the company, Canoo faced rapid cash depletion and difficulties in securing additional funding due to uncertain demand for its microbus-inspired cargo vans.

Operational highlights

It was only last April that T&BB spoke to Greg Ethridge, the Chief Financial Officer of the American EV manufacturer at the 2024 Commercial Vehicle Show who confirmed that the company had indeed purchased manufacturing assets (robotics and machinery equipment) from now defunct, Arrival Ltd. Besides the obvious irony, things seemed rosy for the American startup, which had 1000s of orders from Walmart and the U.S. post office.

That same year the company relocated its corporate headquarters from California to northern Texas as a result of  “corporate restructuring”. The company then laid out bold plans to enter the UK market in 2025 by establishing a new UK subsidiary (Canoo Technologies UK Ltd) based in the Bicester Motion business park in north Oxfordshire. This was on the back of gaining Individual Vehicle Approval (IVA)** for its right-hand drive (RHD) LDV 130 and LDV 190 electric delivery vans in the UK.

The industry writ-large

One may ask, on the back of the Trump regime change, what will happen to the U.S. zero-emission commercial vehicle industry in the U.S.? The first thought that comes to mind will be added investor caution. The collapse of Canoo could make investors more cautious about funding EV startups, leading to stricter funding requirements and a more challenging environment for new entrants. The failure highlights the difficulties in predicting demand for EV commercial vehicles and systemic issues around government funding required for the success of their widespread adoption.

A final word from the CEO

Tony Aquila, Investor, Executive Chairman, and CEO of Canoo said: “We would like to thank the company’s employees for their dedication and hard work. We know that you believed in our company as we did. We are truly disappointed that things turned out as they did. We would also like to thank NASA, the Department of Defense, The United States Postal Service (“USPS”), the State of Oklahoma and Walmart for their belief in our products and our company. This means a lot to everyone in the company.”

*Chapter 7 bankruptcy is a liquidation process, while Chapter 11 bankruptcy is a reorganisation process.

**IVA - This allows sales of up to 300 units in any one year, according to the VDSA in the UK.