Months after struggling to secure a firm source of funding and of watching its shares lose value on an almost daily basis, the people behind Canoo decided Friday to park the EV venture, flat tires and all and filed for Chapter 7 bankruptcy.
Since it’s not a reorganization or Chapter 11 bankruptcy filed in the Bankrupcy Court of Declare, it means the assets of the company with its manufacturing plant in Oklahoma City and a battery facility in Pryor will be liquidated—sold to the highest bidder or pay off its debts.
In a fairly brief announced made Friday night, Canoo explained, “Despite being American-made, successfully delivering to such esteemed organizations as NASA, the Department of Defense (“DOD”), The United States Postal Service (“USPS”), the State of Oklahoma and having agreements with Walmart and others, Canoo has unfortunately been unable to secure financial support from the U.S. Department of Energy’s (“DOE”) Loan Program Office. Recently, the company’s executives were in discussions with foreign sources of capital. In light of the fact that these efforts were unsuccessful, the Board has made the difficult decision to file for insolvency.”
The announcement quoted Tony Aquila, one of Canoo’s largest investors and the firm’s chairman and CEO.
“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.”
Canoo said as a result of the filing, its operations ceased immediately. The plant furloughed dozens of employees in December and at the time, indicated they would not return to work until sometime this year.
Oklahoma Gov. Kevin Stitt was among state leaders who championed the EV maker in 2021 when the company announced it would open a 400-acre campus at MidAmerica Industrial Park in Pryor. More than $100 million in state incentives were promised Canoo but about $1 million were actually provided the firm. In 2022, Canoo bought the former Teres telehandler plant along Interstate 40 in Oklahoma and CEO Aquila promised he would have 500 workers and produce 20,000 vehicles by the end of 2023. It didn’t happen.
While the plant will be closed and the dozens of workers put on the unemployment lines, it will also raise questions about the “political”fallout for Gov. Stitt and other state leaders who supported the company.
The governor has already been the target of one newspaper’s editorial about the EV maker. The Tahlequah Daily Press chastized him saying voters got “skinned” by the governor over Canoo.
In a late December report, KFOR TV news in Oklahoma City quoted one former Canoo executive as saying no cars were ever built at the plant.
While the Oklahoma City Council made a public vote two years ago to support Canoo, any possible political fallout would possibly be minimal. The Council voted for a $1 million incentive to the EV maker, however, according to Mayor David Holt, no money ever changed hands.
Holt explained to OK Energy Today, it was a “potential” incentive and the city’s practice is to make no payments until certain benchmarks are met, but Canoo never met them.
“It was always pay for performance. So there’s absolutely no fallout for the City at all,” he wrote in a communication.
“As I always said, our involvement was always going to be a win-win for us, because the only way we would ever be financially supporting the endeavor was if it had already produced significant economic benefits for our community. That didn’t happen so we never paid an incentive. Of course we wish for all private sector endeavors in our city to succeed, and from that perspective, it’s too bad, but it has no effect on our incentive program or city finances in any way, shape or form.”
Added the mayor, “And by the way, we have approved several incentives through the years that were never paid, because benchmarks were never met. That’s just the way it goes sometimes.”