Canoo, a seven-year-old electric vehicle startup, has filed for Chapter 7 bankruptcy and will "cease operations immediately," marking another significant failure in the challenging electric vehicle market. The company announced its liquidation in a press release, revealing unsuccessful discussions with foreign capital sources and a critical inability to secure funding from the U.S. Department of Energy's Loan Program Office. Founded in 2017 under the original name Evelozcity by Stefan Krause and Ulrich Kranz, Canoo initially gained recognition for innovative vehicle designs, including a commercial electric van and a pickup truck adapted for military applications.

The bankruptcy filing comes after a tumultuous period of financial struggles and operational challenges throughout 2024. By mid-November, Canoo had depleted its cash reserves to just $700,000 and had already furloughed its remaining workforce and idled its Oklahoma factory. The company struggled to produce more than a few electric vans and experienced numerous executive departures, highlighting the intense difficulties facing emerging electric vehicle manufacturers. Canoo's journey represents a broader trend of EV startups facing significant financial obstacles, particularly those that went public through special purpose acquisition companies (SPACs).

Canoo's final bankruptcy filing under Chapter 7 means complete liquidation of its assets, with a court-appointed trustee overseeing the sale and distribution of proceeds to creditors. Unlike Chapter 11 restructuring, this filing effectively signals the end of the company's operations. The startup had introduced several innovative vehicle concepts, including the American Bulldog with its futuristic design, but these will likely remain unrealized prototypes. The company's downfall mirrors other EV startup failures, including Electric Last Mile Solutions, Fisker, Lordstown Motors, Proterra, Lion Electric, and Arrival.

The collapse of Canoo underscores the challenging landscape for electric vehicle startups in 2025, with numerous companies struggling to transition from innovative designs to sustainable business models. Despite initial promise and backing from experienced automotive executives like Krause and Kranz, the company could not overcome fundamental financial and operational challenges. Canoo's bankruptcy adds to the growing list of EV startups that have failed to establish themselves in a competitive market, highlighting the significant barriers to entry in the electric vehicle industry.