Canoo’s Electric Dreams Turn into a Nightmare
A Startup’s Struggle to Deliver
Two years ago, electric vehicle startup Canoo seemed poised to disrupt the delivery van market with its futuristic, egg-shaped vans. But behind the scenes, the company was grappling with a critical safety issue: its test vehicles lacked airbags. This was just one of many missteps that would plague Canoo, ultimately threatening its survival.
Airbag Alert
During initial testing with Walmart, Canoo employees raised red flags about the vehicles’ lack of airbags. Despite this, the company pushed forward, putting drivers and passengers at risk. A Canoo spokesman downplayed the issue, claiming it’s common practice for test vehicles to have certain features disabled during testing. However, federal safety standards require airbags, even in prototypes, unless an exemption is obtained.
Turbulent Times
Canoo’s troubles didn’t start with the airbag issue. Founded in 2017, the company went public in 2020 at a $2.4 billion valuation, but its stock has since plummeted over 99%. Investors lost faith after a contract with Hyundai fell through and senior management began to leave. Tony Aquila, an investor, took control of the company, but Canoo still hasn’t delivered vehicles in large numbers.
Walmart Woes
Canoo’s deal with Walmart was meant to be a game-changer, but it’s been plagued by issues. After initial testing, Walmart asked Canoo to build vans with more cargo space, which the company did. However, even after tweaks, Walmart has yet to purchase a single van. Canoo declined to comment on the matter.
Delivery Delays
Kingbee Vans, one of Canoo’s first customers, received two initial vehicles, but has yet to receive any more despite a contract for up to 9,300 vans. Canoo says it’s “finalizing an allocation” for Kingbee, but the company’s delivery issues persist.
Financial Struggles
Canoo’s financial position is dire, with net losses of $302 million last year and $488 million the year before. The company has only $19.1 million in cash or cash equivalents on its balance sheet and has acknowledged “substantial doubt about our ability to continue” in its earnings reports.
Supplier Strife
Employees say they’ve had difficulty ordering parts due to unpaid invoices, leading to calls from collection agencies and declined corporate credit cards. Canoo has been sued by multiple suppliers and a communications agency for allegedly failing to pay what it owes.
Executive Exodus
Many of Canoo’s design, engineering, sales, and automotive leaders have left the company over the past 18 months, including cofounder and chief design officer Richard Kim. The company’s last remaining cofounder and chief engineer, Christoph Kuttner, left in October.
Oklahoma Facility Fiasco
Canoo is building a manufacturing facility in Oklahoma City, but former employees question whether the company will ever complete it. The state of Oklahoma, the Cherokee Nation, and Oklahoma City awarded Canoo up to $113 million in incentives, but progress has been slow.
A Glimmer of Hope?
Despite its struggles, Canoo continues to debut new prototypes and issue press releases about new contracts. However, former employees are skeptical about the company’s ability to fulfill these agreements. Canoo’s future remains uncertain, but one thing is clear: the road to success has been fraught with challenges.
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