Electric Car Startup Canoo Goes Out of Business, Great Potential Unrealised

Canoo futuristic electric van that Walmart had ordered. (Doc. Canoo)

JAKARTA - The electric car startup from the United States, Canoo, officially filed for bankruptcy under Chapter 7. The decision comes after the company failed to obtain additional funding over the past few months, ending a hopeful journey that began in 2017.

Founded with the vision of presenting futuristic electric vans for the needs of various industries, including large companies such as Walmart, Canoo had caught the eye. Imagine in 2022, Walmart signed an agreement with Canoo to buy 4,500 electric vehicles for delivery. However, production and market reality said otherwise. In recent years, the company has only been able to produce a few vehicles away from its original ambitions.

The electric van segment, which was once seen as the future of commercial vehicles, is now facing a decline in demand. Only a few big players survived, while many other small startups suffered the same fate as Canoo stopped operating.

Launching Autoweek, Wednesday, January 22, Canoo itself actually sent several vehicles to prestigious customers, including NASA for astronaut missions. However, it was not enough to withdraw support from the Loan Program Office in the US Department of Energy and new investors. In its official statement, the company revealed that they had tried to find capital from foreign sources. However, after the effort failed, the Board of Directors finally decided to file for bankruptcy.

In November 2024, signs of a fall became even more evident. Canoo laid off nearly a quarter of its employees due to growing financial pressure, although the company had recorded several positive moments. Among them are the delivery of 22 vehicles in 2023, orders from NASA, and the creation of new jobs in Oklahoma.

However, Canoo's main problem is the large inequality between the minimal production scale and very high cash burning. In 2023, the company's net loss reached more than 300 million US dollars.

Ironically, Canoo actually has big customers who are ready to support, apart from Walmart, who once planned to buy 4,500 electric vehicles, USPS also briefly considered the Canoo electric van for its fleet before deciding not to switch entirely to electric vehicles.

CEO Tonytila described Canoo's journey in the last two years was very slow. The company was indeed able to deliver small batches of electric vans to customers, but never came close to the mass production level needed to survive.

Now, Canoo's journey has ended, leaving its mark as one of the startups trying hard to stay in the increasingly competitive electric vehicle market. Despite having big ambitions, failure to secure sustainable funding is an unavoidable final blow.