EV Maker Canoo 'Goes Belly-Up After Moving to Texas' (sfgate.com) 68
2021: "Automotive Startup Canoo Debuts a Snub-Nosed Electric Pickup"
2025: Canoo "Goes Belly-Up After Moving to Texas"
"Its production volumes paled in comparison to Canoo's rate of cash burn, which was substantial, with net losses in 2023 totaling just over $300 million..." reports AutoWeek. "It was able to deliver small batches of vans to a few customers, but apparently remained distant from anything approaching volume production."
"Back in 2020, electric vehicle maker Canoo snagged a $2.4 billion valuation before it had shipped a single car," remembers SFGate. "Now, just months after yanking its headquarters from Los Angeles County to Texas, the company has gone belly-up." In its four-year span as a public company, Canoo battled investor lawsuits, Securities and Exchange Commission charges, executive departures and a mixed reception of its cars. Auto tech blogger Steven Symes recently likened Canoo's cargo-style van to an "eraser on wheels."
"Canoo is the latest EV startup to go bankrupt after merging with a special purpose acquisition company (SPAC) as a shortcut to going public," notes TechCrunch. "Electric Last Mile Solutions was the first in June 2022. But since then, Fisker, Lordstown Motors, Proterra, Lion Electric, and Arrival all filed for different levels of bankruptcy protection in their various home countries." In the years since it went public, [Canoo] made a small number of its bubbly electric vans and handed them over to partners — some paying — willing to trial the vehicles. The U.S. Postal Service, Department of Defense, and NASA all have or had Canoo vehicles.
2025: Canoo "Goes Belly-Up After Moving to Texas"
"Its production volumes paled in comparison to Canoo's rate of cash burn, which was substantial, with net losses in 2023 totaling just over $300 million..." reports AutoWeek. "It was able to deliver small batches of vans to a few customers, but apparently remained distant from anything approaching volume production."
"Back in 2020, electric vehicle maker Canoo snagged a $2.4 billion valuation before it had shipped a single car," remembers SFGate. "Now, just months after yanking its headquarters from Los Angeles County to Texas, the company has gone belly-up." In its four-year span as a public company, Canoo battled investor lawsuits, Securities and Exchange Commission charges, executive departures and a mixed reception of its cars. Auto tech blogger Steven Symes recently likened Canoo's cargo-style van to an "eraser on wheels."
"Canoo is the latest EV startup to go bankrupt after merging with a special purpose acquisition company (SPAC) as a shortcut to going public," notes TechCrunch. "Electric Last Mile Solutions was the first in June 2022. But since then, Fisker, Lordstown Motors, Proterra, Lion Electric, and Arrival all filed for different levels of bankruptcy protection in their various home countries." In the years since it went public, [Canoo] made a small number of its bubbly electric vans and handed them over to partners — some paying — willing to trial the vehicles. The U.S. Postal Service, Department of Defense, and NASA all have or had Canoo vehicles.
They moved to Texas so they could (Score:5, Interesting)
It's one of the major problems Karl Marx talked about in his books how businesses would just go wherever they could abuse workers the most. But as usual all anyone can remember about Marx is a couple of tin pot dictators used them to write pamphlets.
Re:They moved to Texas so they could (Score:5, Interesting)
Screw over their employees. Lots of businesses do that. Texas will let you do all sorts of nasty things to your employees up to and including not paying them and making it basically impossible to sue or lost wages. Local labor boards are so underfunded they are basically non-existent.
My God, this is a historical event. I actually agree with you. One of my first professional jobs was in Texas, and the contract had a noncompete clause in it. Not a problem because it was a niche job. Okay, so nothing really strange. The problem is that when I went to leave, all of a sudden the noncompete clause is that I couldn't work in that county or any adjacent counties. So all of a sudden I couldn't get any job in the industry in those areas, even though all of the jobs I would have gone for would have been eventually funneling clients into that original company. There was no competition, but my attorney assured me that the first company would push it and run me into bankruptcy with legal fees.
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What does the fact you were in Texas have to do with your decision to take a job with a non-compete clause and the employer would enforce it?
Really sounds more like a "you" problem, not a Texas problem...
Re:They moved to Texas so they could (Score:4, Insightful)
No, it's a Texas problem. In most places, that kind of idiotic noncompete clause would have been totally illegal. I guess technically it would have been in Texas as well, but like my attorney said, I'd go bankrupt trying to fight it. So I just galivanted around the country for a few years.
Re:They moved to Texas so they could (Score:5, Informative)
And I hate to reply to myself, but in over 25 years Slashdot still doesn't have an edit function.
This is eventually going to be a big problem for Texas with tech companies relocating. They're going to have to do something about it, but considering that the Texas legislature meets only once every two years, I think we're going to be waiting a while. Imagine, you get a job with company X and have Z skills. For whatever reason, you leave company X, but company X has a noncompete that you can't work in the entire fucking state for three years or whatever they decide. So you take your Z skills and go somewhere else. It's ultimately Texas killing itself.
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In most places, that kind of idiotic noncompete clause would have been totally illegal.
Only California, Minnesota, North Dakota, and Oklahoma completely ban non-compete agreements.
The FTC was considering a Federal ban, but I don't know if the new administration will continue that.
Re:They moved to Texas so they could (Score:5, Insightful)
I don't know if the new administration will continue that.
Let's ponder. Policy fucks workers but not companies. Hmm. Hard to guess which way that will go.
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You are attributing a consistency and coherency to Trump's policies that is not supported by evidence.
Non-competes help established companies and harm startups.
The ban on non-competes is one reason that Silicon Valley happened in California.
Re:They moved to Texas so they could (Score:5, Interesting)
Banning is really just the most extreme form of state restriction. A majority of states (33) have some forms of restrictions on non-competes that fall short of banning. On top of that we shouldn't forget case law, which differs radically between states.
For example, on paper Massachusetts and Texas have similar restrictions on non-competes, with a few minor differences. Both require restrictions on the employee to be "reasonable". But Massachusetts courts take a very strict view of "reasonableness" and Texas courts take a very permissive view. This is huge, because it determines who has the burden of proof for whether a restriction in the contract is enforceable. Thus Random361's experience in Texas where his lawyer advised him that challenging the noncompete would cost more than he could afford. In Massachusetts. In Massachusetts it's more likely to be the employer's lawyer telling him it's too expensive to pursue.
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You don't have to have a non-compete ban though. You just need to have a non-compete that's reasonable. A non-compete that bans you from working in the entire United States for 5 years, for example, even in a state without a non-co
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Inalienable rights can't be contracted away per current jurisprudence.
Free Association includes the mode, not just the person.
Imagine saying you could be friends with Bob but not as your priest or plumber. Or employer.
This is also why occupational licensing is unconstitutional.
Say what you want about Yelp but it didn't exist in 1890.
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Oh, I'll do you one better. Imagine a profession where you do your training and get federal and state licensing. Then some private organization comes in and decides to set up what amounts to a guild. Now, that guild isn't legally required for anything. But if you're not a member of that guild, most people won't hire you. There is no alternative. You either pay the guild the extortion money, or you don't work. This is not a union. They don't advocate for their members, there is no collective bargaining or an
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So in any other jurisdiction the company sues you you show up at court and say it's a non-enforceable contract and the judge says yeah no shit and tells the company to get the fuck out of his court and maybe pay a little bit of damages for a slap lawsuit
In Texas you probably don't even get to see a judge because you go before an arbiter picked by the corpor
Non-compete don't really matter anymore (Score:4, Interesting)
It's almost as if stopping antitrust law enforcement in the 1980s was a bad idea. Funny thing is the Biden administration had started to gear up on enforcing antitrust law and it was paying dividends in better wages and lower prices. But well, you know.
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One of my first professional jobs was in Texas, and the contract had a non-compete clause in it. Not a problem because it was a niche job. Okay, so nothing really strange. The problem is that when I went to leave, all of a sudden the non-compete clause is that I couldn't work in that county or any adjacent counties. So all of a sudden I couldn't get any job in the industry in those areas
"all of a sudden"? Really?
To be clear, they presented you with a non-compete agreement, you Read it (right?), Signed it, worked there for a while, and then when you wanted to change jobs you finally sought legal advice and are mad because the employer would have held you to the terms of the non-compete agreement...
I'm not seeing an issue beyond your youthful decision to sign a binding agreement you didn't understand.
Did you assume it was toothless? Unenforceable? Illegal? Those are all "you" problems, not T
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When I said "niche job" what I meant was that it was a job as a hospitalist. So, the reasonable interpretation of the noncompete clause was that I couldn't leave and then do a job competing with them as a hospitalist at another company. That is reasonable. Stupid, but reasonable. This was understood. The problem arose when I left and they extended the noncompete to any medical job in the applicable area, even if those jobs would have ultimately been feeding business to my former employer. It was a huge "fuc
So why did you agree to the extension? (Score:2)
The problem arose when I left and they extended the noncompete to any medical job in the applicable area, even if those jobs would have ultimately been feeding business to my former employer.
The contract you signed when you started binds _both_ parties.
Why did you agree to this "extension" when it wasn't in your interest?
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You misunderstand. They changed the interpretation of it. It was legal bullying. The entire point here is that what I signed and what they "revised" it to be were two separate things. I had legal standing to tell them to go fuck themselves. Unfortunately, because of the way Texas courts treat this stuff, I would have been buried under litigation for a long time. That was the entire point of the original post in this thread. My attorney said that while I would win, it just wasn't worth all the bullshit. So I
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I think it's far more likely that it's just impossible to get anything done in California in a timely manner, especially in any of the larger metro areas.
But as usual all anyone can remember about Marx is a couple of tin pot dictators used them to write pamphlets.
His own writing seems to justify that. He expressed a sentiment that democracy would only get in the way of progress; no point in waiting for it, with the promise being that eventually after everybody has acclimated to the planned economy, democracy would later return on its own, followed by the withering of the state. Fidel Castro in particular seems to h
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Cuba would be in a much different and likely better position if the USA wasn't embargoing them and doing whatever they can to make sure the country never succeeds.
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California is still business friendly, and relatively fast.
It does suffer from stupidity. particularly with regards to housing. But tons of companies move fast and break thins in California.
But California has raised taxes on millionaires, while lowering taxes on the middle class. For workers, California is a much better place as long as they have a place to live.
Lots of executives want to leave after they have made a little money, and Texas does not tax millionaires.
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California is still business friendly, and relatively fast.
Relative compared to..? Getting permitting for anything takes ages here.
For workers, California is a much better place as long as they have a place to live.
Where in CA? For LA, people who don't live and work here might say things like this. You don't live somewhere for free. Reality is you PAY for housing that barely counts as adequate in most of the country, you live in a tiny dwelling somewhere between the bloods and the crips (yes, really) or you commute 90 minutes each way in the 3rd worst traffic in the country.
Let's add perspective: If you make less than 100k here, you're sacrificing
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I mean the voters got what they wanted. They wanted the jobs that were all sent to countries with lousy pay and shitty working conditions brought back to the USA. Be careful what you wish for.
At the end of the day, most of the companies that do so are only paying lip service to the idea of happy workers. It's like Disney here in Florida, they made some big stink about how they were going to cut back in investing in Florida because they expected they'd have difficulty filling new positions in this right-w
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If it's that bad why not just leave? You might like it better here in California.
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In a couple years there will be lots of new homes available in Los Angeles County and the surrounding area.
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OMG no! Businesses act in their own self interests?? How can we allow such a thing?? Thank the heavens above that employees always act altruistically for the good of The People and not their own self interests.
Yeah, of course some businesses are a-holes and mistreat employees, but to make the connection from that to all businesses will "abuse workers the most" that they can get away with is Marxist nonsense. And leaving out of the equation that the employees are sometimes a-holes acting in their own sel
Of course... (Score:5, Insightful)
Of course, the issue is they moved to Texas, not that they barely had a product or customers, spent money like drunken sailors, and went public way, way too early. No, obviously the move to Texas brought about their implosion. /SMH
Re: Of course... (Score:4, Insightful)
Maybe just editorializing on the part of the editors, but the title and summary repeatedly make the connection to Texas even though it otherwise seems like a very minor detail, likely not even worth a discussion. Like somebody wants a counter-narrative against businesses moving to Texas. The first poster has bought into that at least, making Texas at least half of the topic, the other half having something to do with Karl Marx.
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But the move to Texas *is* significant. It shows a symptom that led to the collapse. What kind of young startup company changes the state in which it operates? In this case the move to Texas shows directly either a) an attempt for a company to exploit a legal difference, or b) a company run by complete morons who do nothing other than waste money.
Texas is also relevant for another reason. It's the anti-California i.e. the last place in America you'd expect to find a thriving EV carbon neutral save the world
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If it "is" significant, why didn't the authors present that? Why didn't they say anything you said if the point of their article is what the headline said?
"Texas is also relevant for another reason. It's the anti-California i.e. the last place in America you'd expect to find a thriving EV carbon neutral save the world company."
It's should be noted also that California is "anti-Texas" and this article was written by and for Californians. But your point is interesting both for the fact that Tesla is located
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Moving is expensive.
Canoo didn't have the funds to cover it.
The root problem was having no viable product or customers, but moving to Texas with no money in the bank was the proximate cause.
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Right, and the article headlined the "move to Texas" and then had nothing about that move. Might as well have said "went bankrupt after the CEO ate breakfast".
Nevertheless, the first comments are solely focused on smearing Texas on /. What a surprise.
"after" != "because" (Score:1)
Just to be clear:
The struggles at Canoo were apparent long before the bankruptcy filing
Even if they hadn't moved, they would likely have gone belly-up, possibly long before January 17.
Re: CEO's extravagant lifestyle (Score:1)
Pre-IPO investors (and post-IPO investors too!) should take the lifestyle of the executives and others with equity into account before investing: If they have higher-than-middle-class lifestyles without a good explanation* that should be a red flag that they may put "the company paying for my extravagant lifestyle" ahead of long-term company valuation.
* Good explanations would typically be "has stable wealth/income independent of this company's performance" such as a family trust, a windfall, or simply dec
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I think they are trying to say that it is weird to move headquarters when your projections are THAT bad. they must have known they were dead for at least 6 months. So why move HQ?
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Company funded move out of CA to Texas? They could give themselves generous relocation packages... Just a thought.
Phoenix from the Ashes (Score:3)
I sincerely hope that someone buys whatever assets they can from Canoo and builds a real company.
I really liked what they were doing with the pickup truck, but they appeared to be deeply mismanaged and not terribly sure what kind of company they wanted to be. At first it was a subscription model for fleet sales. Then it was selling delivery vans without a sub...something they got a lot of orders for. Then they also introduced the pickup truck...then another one...then announced they weren't planning on selling them despite all the time, effort, and money spent on designing, developing, and marketing them. All the while, the company is paying for CEO Tony Aquila's private jet.
I mean...WTAF? Talk about a top-down failure of leadership! That guy isn't fit to run a lemonade stand.
Someone buy this company, do the fleet sales of delivery vans and after a few years of success, start looking to make those pickups. And fly commercial in coach if you have to fly at all, but better PR would be to road trip with the van.
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A small company slowly building market share can't afford a CEO flying a private jet. So what is any sociopath CEO who suddenly gets Billions in VC money going to do? Expand everywhere, spend money like crazy. Because the more money being spend, the higher wage and benefits are "justified" for the CEO. Got to waste money to make money.
Maybe as a society we'll learn not to hand out money to sociopaths ... LOL.
PS. same is true for non profits, building an endowment when you could spend all the money fast to j
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A small company slowly building market share can't afford a CEO flying a private jet. So what is any sociopath CEO who suddenly gets Billions in VC money going to do? Expand everywhere, spend money like crazy.
Usually they're just narcissistic rather than sociopathic or psychopathic (there's a fine but important distinction between these two even,) which is an important distinction. AFAICT Tesla hasn't paid Elon Musk anything at all in years, his only compensation being contingent on the company increasing its market cap 10 fold over 5 years, which seems to have been done, but the agreed compensation is still tied up in court. Still a narcissist who flies a private jet anyways. The compensation in that case is no
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"Maybe as a society we'll learn not to hand out money to sociopaths ... LOL."
Sociopaths control the money. Capitalism is inherently sociopathic.
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So you believe there are actual, valuable bits of intellectual property that someone could turn into a business? If they had an actual product, actual production capabilities, etc they likely wouldn't be in this situation.
After Solyndra imploded, did anyone get their remains and turn it into a viable business?
If the claims these companies make as the circle the bowl were true, the companies wouldn't be circling the bowl... I could be wrong, but i doubt it.
Baffling. (Score:2)
Sure, I can see the appeal of not being a cog in someone else's machine, or of finding badge engineering kind of meh; but from the perspective of risk a
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What I don't understand about the EV market is why there is so much interest...
I can halfway understand the interest because for most adults alive today they've been fed a steady diet on how fossil fuels are bad therefore we need some alternatives. This has evolved into all internal combustion engines are bad even though there's been considerable gains in biomass fuels and synthesized fuels.
Investment in EVs has become "fashionable" and with some successes like Tesla such investments are believed to be potentially profitable. Tesla has grabbed the markets for sport sedans, and a few
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I can halfway understand the interest because for most adults alive today they've been fed a steady diet on how fossil fuels are bad therefore we need some alternatives. This has evolved into all internal combustion engines are bad even though there's been considerable gains in biomass fuels and synthesized fuels.
Synthesized fuels are a waste of energy, getting about a sixth of the primary energy to the wheels compared with a battery electric vehicle. If you burn the fuel in a combustion chamber instead of a fuel cell, you additionally get all the disadvantages of internal combustion engines minus the CO2 problem - noise, pollutants like carbon monoxide, nitrogen oxides, sooth and polycyclic aromatic hydrocarbons. E-Fuels are a dead end before they even begin to become a thing. Biomass fuels are marginally better be
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You'll still have the CO2, unless you've found some combustible fuel other than hydrogen that doesn't have carbon. In the case of hydrogen, I'd be a bit confused, because regardless of whether you believe hydrogen is a synthetic fuel, hydrogen cars are not internal combustion, instead they rely on redox to directly extract the electrons, making it effectively a hydrogen battery, hence the term fuel cell.
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There are combustion engines adapted to burn Hydrogen instead of hydrocarbon fuel, like the BMW iX5 Hydrogen.
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If we keep building out PV, lots of electricity will be available almost free 8 hours a day for most of the year.
The problem is not the energy cost, the problem is the infrastructure cost. CO2 will become very expensive at net zero, ironically.
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What I don't understand about the EV market is why there is so much interest(and enough investors willing to take it seriously ...
It's the same reason the cryptocurrency market is littered with unending shitcoins: everyone who missed getting in on the ground floor with the first thing that was successful, imagines they might be able to be part of lightning to striking twice.
.
Thing is, if you're super wealthy and it's all hookers and blow money anyway, throwing money at every dumb startup idea that comes down the pipe will eventually pay back handsomely when one of those companies actually does beat the odds. But to the rest of us who
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It's the same reason the cryptocurrency market is littered with unending shitcoins: everyone who missed getting in on the ground floor with the first thing that was successful, imagines they might be able to be part of lightning to striking twice.
Or, to phrase it differently - the only way to make money from a Ponzi/Pyramid scheme is to get in at the beginning.
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Well, there's Dunning Kruger. It's easy to underestimate how complicated, expensive and risky designing a car is, even if you *think* you're pretty hard-nosed about it.
Take your typical boring Japanese economy car. It doesn't squeak or rattle, and all the body parts fit together without any odd gaps. It's got a paint job that won't rust through in ten or even fifteen years of driving on northern roads. It's got a transmission that lasts so long nobody really can put a number on it, but safe to say a qua
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If you think you've got some fascinating plan for compact electric motors, or high-current charging, or some other aspect of what would go into an EV you might well be right(especially given how much backing chasing fuel cells got in the Japanese context); but even if you are right that just means you
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> "sure, let's do powertrain and chassis and software and battery and [...]" just seems like a plan that is hard to take seriously.
Canoo was buying their motors and drivetrain from Jing-Jin Electric and Dana Inc. respectively. I know this, because these two companies files lawsuits against Canoo in late 2024 for not paying their bills. I don't know the full internal structure of the company but it would not be surprising in the least if they had outsourced most or even all of the manufacturing and only d
"Hundred per cent graft" situation? (Score:5, Informative)
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It would behoove EV investors to look into the history of the econo-car The Dale, and the CEO Liz Charmichael, having a great idea, a great design, and great marketing isn't enough...
No, the CEO was only it for himself. (Score:4, Insightful)
Don't blame moving to Texas when it was simply and clearly mismanaged and the funds misappropriated, to put it nicely.
I joked you could never tell if their vehicle was coming or going, well that's settled.
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There was interest in their design, they kept getting money - but it was all misspent on expenses catering to the CEO flying around the world instead of making more vehicles or an actual production facility.
Is the CEO named Karen Bass by chance?
https://www.nytimes.com/2025/0... [nytimes.com]
Not that much moved to Texas (Score:2)
I found Canoo on Google maps.
There's no factory, just two rows of what looks like u-stor-it units converted into DIY garages.
Two Canoo billboards facing the road. That's it.
No factory.
Less space than a convenience store.
Lame.
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> No factory.
I'm loathe to make this comparison, but every first gen Tesla Roadster was assembled in what was basically a light industrial park; the kind of place that's like a strip mall but with garage doors instead of glass storefronts. You would not have recognized it as a place where vehicles were assembled. Tesla worked out of that space for the first decade or so of their existence.
So the fact that you don't see "a factory" is not really an issue and you shouldn't have expected to see one either.
=
What I wanna know is where I can buy the surplus (Score:2)
Next time move to Australia... (Score:2)
SPAC? (Score:2)
Ah, yes, we'll give you billions, and decide how to run you.