The American electric car brand Canoo has filed for Chapter 7 bankruptcy, leaving the company unable to meet its financial obligations.
Management owes several creditors amounts ranging between $10 million and $50 million each, while the company itself is left with just $50,000 in cash.
Despite its financial struggles, CEO Tony Aquila has faced criticism for receiving an exceptionally high salary and benefiting from private jets.
Ambitious Beginnings
Founded in 2017, Canoo aimed to revolutionize the electric car market with innovative vehicles designed for families and the transportation sector.
The company developed a versatile "lifestyle car" capable of functioning as a minibus, pickup truck, and transporter.
But the ambitious plans never materialized into commercial success. Canoo managed to produce only a small number of vehicles.
By 2023, the company generated just $6.5 million in revenue — one-third of which came from the sale of three vehicles to the state of Oklahoma. Hopes for financial backing from the U.S. Department of Energy’s loan program were dashed when the application was denied, leaving the company unable to secure additional funding.
Financial Fallout
With debts owed to 49 creditors amounting to between $10 million and $50 million each, Canoo’s liquidation under Chapter 7 bankruptcy leaves little hope for creditors to recover their losses.
Unlike Chapter 11 bankruptcy, which allows for restructuring, Chapter 7 mandates a full liquidation of the company's assets.
In a press release, CEO Tony Aquila expressed disappointment over the company’s failure: “We would like to thank the employees for their dedication and hard work. We know that you believed in our company, as we did. We are truly disappointed that everything turned out the way it did.”
Aquila has faced scrutiny in recent years for his high compensation packages and use of private jets, even as Canoo’s financial problems deepened.
According to TechCrunch, the bankruptcy estate has enough funds to reimburse customers who reserved electric cars, offering some relief to affected buyers.
