EV maker Canoo, once worth $2.4B, files for bankruptcy | Hacker News Reader

EV maker Canoo, once worth $2.4B, files for bankruptcy

sfgate.com

61 pointsbane50 comments

"Calif.-founded EV maker Canoo, once worth $2.4 billion, goes belly-up after moving to Texas"

Full title. Another L for the SPAC era.

What does the inclusion of the move to Texas actually have to do with the downfall of the company?

I get that it is the original title, but even the article itself points out that the company was in dire straits well before the move.

The move (and forced relocation of employees) was likely a way to force attrition, since it was followed fairly quickly with layoffs elsewhere.

If anything, including mention of the move in the title just muddles the readers' expectations of the article, IMHO, and the article would be better off without it.

> The move (and forced relocation of employees) was likely a way to force attrition, since it was followed fairly quickly with layoffs elsewhere.

You might expand the full title to "After move interpreted by experts as likely a way to force attrition" to explain the relevance :)

I agree. I think we can reasonably posit why given the source. Call it selective YIMBYism maybe?

Maybe the CEO wanted to move back to Texas before they went bankrupt? /s

Has any SPAC ever actually succeeded in the sense that whatever it purchased didn't die after a year or was atleast profitable? Every one of them always seemed like a huge obvious scam to dump the bags on dumb money.

I think that’s sort of the point of SPAC: a lot less scrutiny than a full on IPO so shakier companies can go public.

If someone is the type who willingly hand over their money knowing what a SPAC is and does, he’s a contrarian who smarter than everyone else, an idiot, or someone who thinks he can make a quick buck by letting the idiot hold the bag at the end — but really the latter two end up being the same.

I maintain a little de-SPAC portfolio to track their progress. Many of them are dead, there's about 50 companies left in my tracking now.

The only companies on this list with stock prices over the original $10 SPAC price are:

- Oklo (mini nuclear reactors)

- DraftKings (gambling)

- Hims & Hers (wellness telehealth)

- Grindr (gay hookup app)

The majority of companies have lost 80-95% of their original value. Many SPACs have done a big reverse split, so their price appears to be over $10 but the original price would have been in the hundreds.

Ok, but Grindr and DraftKings were already viable businesses for a decade before SPACmania.

Yep. I think Hims & Hers is the very rare SPAC that was a new company at time of its listing (founded in 2017), and has managed to deliver both profits and shareholder value. Perhaps it's even the only one.

What about RKLB (Rocket Lab), which is currently at $29?

DJT?

They succeeded in the sense that Chamath Palihapitiya et al made a shitload of money out of hawking them.

He's ALL IN!!!!

I was going to ask this same question. Literally every SPAC I can think ranged from bad to unmitigated disaster. Probably my favorite example is Getaround, the car sharing company that tanked immediately after the SPAC merger. How did that deal even happen?

Does anyone know of a site that tracks the outcome of SPAC mergers? I found some articles but most of them are pretty old. Curious if there have been any successes.

It feels like so much "financial innovation" of the past 30 years in that it was just a way for rich people to get even richer and, as you say, leave the dumb money as bag holders.

Off the top of my head: DraftKings, Lucid, ChargePoint

Lucid and ChargePoint are yet to be out of the jungle and still being pumped by investor money.

I mean DraftKings is currently successful, and while I think Lucid makes fantastic cars and I want ChargePoint to succeed, they may not be dead but their stock is well below the $10 SPAC price and they're far from profitable.

Hippo Insurance (HIPO)

Hippo stock has lost 90% of its value since the SPAC. They did a 1-to-25 reverse split at one point.

sorry I misread the thread and thought the discussion was the reverse :D

SOFI makes money. It's down a bit from the merger price, but I think it's fair to say it's a real company with a real business model.

Rocket Lab

And potentially QuantumScape, although they've been through their SPAC related shenanigans and relevant lawsuit, they seem to be doing ok now

I've driven one.

Amazingly, they are one of the very few automotive folks that actually said "yes, sure" when I ask my requisite "can i drift it?" Unfortunately, I was driving it inside a building that was to be one of their future factories, and declined to actually do so for safety reasons.

> looked like an eraser on wheels

Have they seen any vehicle newer than, I dunno... 2010? Everything is a nondescript blob car these days.

I kind of like what the folks in British Columbia are doing for their EV prototypes for Semi Trucks (technically a hybrid, EV with onboard generator): https://www.edisonmotors.ca/topsy

I desperately hope their CEO bumps into the right person at a convention and they end up branching out to producing chassis for emergency vehicles.

Funny how different our perceptions are. I've thought cars have been pretty ugly from the late 70s to about 2010, with a few notable exceptions.

Except the cybertruck, of course.

> Everything

I'm rather fond of the new Lotus Emira or the Aston Martin Valhalla, both which look like anything but a "nondescript blob".

The lotus costs over 100k, and the Aston Martin supposedly sells for a million. Not exactly everyday soccer mom cars.

Hell, most people wouldn't spend 100k on a tesla either, its just too expensive...

Even still, there's the Toyota Supra (~$57k USD) or GR86 (~$31k USD) which also look nothing like blobs.

Exige V6 mmm

Dunno, I like my MX-5 ND.

As a meta question, at this point, what is the value add that these startups are trying to do? It seems like a ton of them fail to make a viable base platform profitable and able to mass produce. Is there a market for a white-label EV platforms that are proven able to be executed well on a production line and allow the startups to actually complete on the fit and finish bits?

Or is the base platform the actual value that they're trying to execute on and failing?

maybe the EV market just ain't big enough. EV car maker going belly up is also happening in China.

The Chinese market is very competitive though with lots of quite successful companies that only got into EVs fairly recently. For example Huawei and Xiaomi (two phone manufacturers) started selling EVs last year and were able to ramp up production quite quickly. Apparently the cars are quite nice even and they sell well.

>Is there a market for a white-label EV platforms that are proven able to be executed well on a production line and allow the startups to actually complete on the fit and finish bits?

That was more or less the arrangement between Magna Steyr and Fisker, which failed

EV Platforms, and all car platforms actually, are already white label. Look up "badge engineering".

- So, going back 10-12 years, Tesla suddenly came and ate legacy ICE makers' lunches on many fronts – launching a successful EV, requisite charging network, overall UX, UI, driver assistance features, performance, sales and delivery, costs, software development, components, repair etc.

- Legacy ICE makers took a long time to figure out how to respond. At first, many of them thought all they had to do to compete was to was to throw in a large portrait screen. Then there were many abominations of them trying to fit EV components into their ICE platforms. I would say the Germans didn't get good at it until 2023-2024 (but they still have a lot to figure out).

- During the time, the legacy ICE makers were figuring things out, the EV startups had the advantage of not having the burden of legacy and figuring things out from first principles. There was a lot of money to be made here. In my estimation, this window of opportunity has now mostly passed.

> It seems like a ton of them fail to make a viable base platform profitable and able to mass produce.

Automotive is essentially a volume game in the long run. This is hard and figuring this out is where the value is. Basically, if you're able to figure out this part, it's a lot less effort to figure out the other parts and control the entire thing. This is similar to how car companies make their own engines (other than in specialty, low volume cases).

> Is there a market for a white-label EV platforms that are proven able to be executed well on a production line and allow the startups to actually complete on the fit and finish bits?

There is a market but it doesn't make sense for EV startups to do this because most of the value is in the previous bit, and the value add from this part is marginally less. Also, cars are complex and it takes a lot of work to integrate things made by others. Car companies do form partnerships to share these things.

Some cases:

1. Honda was late to the EV game and found it easier to form a partnership with GM. This resulted in the Honda Prologue, which is built by GM and is essentially a Chevy Blazer [1]. This model has been a success. However, Honda has cancelled the deal and will be releasing new cars built on its own platform [2].

2. Rivian is one company trying to scale on the platform side – they came out with high price-point vehicles. e.g. R1S competes with Range Rover. They're using the same platform for R1T trucks and for Amazon delivery trucks. Rivian had a partnership with Ford, where Rivian would make the platforms for Lincoln EVs, but Ford pulled out and are making Lincoln EVs on their own platform

VW Group was having major issues with its internal software and electronics tier I Cariad. So, they invested $5bn into Rivian so that they could use Rivian's expertise in this. See [3] for Rivian's perspectives on the various partnerships.

[1] https://www.motortrend.com/news/2024-honda-prologue-chevrole... [2] https://www.caranddriver.com/news/a43699034/honda-new-ev-pla... [3] https://electrek.co/2024/07/23/rivian-ceo-spills-tea-why-for...

Good news for Tesla... Their volumes are dropping!

The stock remains in lala land

It was ~2005-ish, I was just out of highschool, I saw a short documentary talking about a (different) electric car company working on revolutionary electric vehicles that had their working components in the form of a "skateboard" with changable chassis on top. It's been decades now, I don't know what happened to them.

It was 2017, Canoo was founded, I actually bought some stock in them. A "little bird on my shoulder" told me to get out of that mess. Glad I did.

Moral of the story for car startups with pipe dreams. Release SOMETHING as quickly as possible, get money flowing as quickly as possible. Even if it's not a car, JESUS CHRIST make electric scooters FIRST and then move up slowly towards gold carts, then motorcycles, then eventually Electric Cars. Whatever you do, DO NOT spend decades without releasing a single product.

Shame, I thought they had great potential.

Guess that CAN-oo was more of a CAN’T-oo

They did a really nice job on the paint, though. Their car is very shiny.

Sad. If nothing else they were insanely aesthetic.

the good news is most of their good engineers had already gone to vw rivian and other companies in LA.

sad, but it shows the need for great leadership.

bad idea: moving to texas

bad idea: lack of focus. build ONE vehicle

investors have soured on EV capital, shortsighted pivot to AI, even though the industry will boom once we have another energy crisis and another boom in nuclear and renewables in 5-15 years.

somewhat related, the xpeng helicopter thing at CES was an exact rip off of the quirky canoo light bar design, so maybe the ethos of this car will live in a Chinese copy.

Renewables aren't even a boom / bust cycle now. Their cost advantage, constancy issues aside, means they are an economic inevitability.

I don't think the US is going to have any more problems for quite a while in energy of the petroleum sort. The bakken shale formation isn't running out anytime soon.

Nuclear however, has fundamental issues with getting its costs down.

I'm guessing at some point EV companies from China, which will be normally blocked from the US market we're reform basically as OEM manufacturers for the complete car design and then some US EV company simply badges it.

I don't see why Chinese companies wouldn't start setting up Mexican or Canadian manufacturing facilities. Chinese companies need to diversify their global footprint to avoid the inevitabilities of demographic decline in China and an increase in authoritarianism

Moving your HQ, return to office mandates and similar are a bad idea from an employee's point of view, but an excellent idea for a company if it wants to get rid of employees without having to pay severance. Of course, they risk most of their talented people leaving first, but I'm not sure companies really care about that...

Not if they're in the Elon Church of management. He's the new Jack Welsh.

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