From Government Contracts to Bankruptcy: How Canoo's Electric Vehicle Dreams Collapsed

When Canoo launched its electric vehicle vans with ambitious plans to serve major U.S. government agencies, the startup seemed positioned for success. However, less than two years later, the company filed for bankruptcy in January 2025, leaving NASA, the United States Postal Service, and the Department of Defense scrambling to replace the vehicles they had tested or deployed. The collapse of Canoo offers a cautionary tale about the challenges facing emerging EV manufacturers in a competitive and unforgiving market.

Government Agencies Pull the Plug on Canoo’s Electric Vehicles

NASA and USPS both discontinued their use of Canoo’s electric vehicles, signaling a loss of confidence in the startup’s ability to deliver ongoing support. NASA had acquired three Canoo vans in 2023 for transporting astronauts to launch pads during Artemis lunar missions, but by October 2024, the space agency pivoted to leasing Astrovan, a vehicle purpose-built by Airstream for Boeing’s crewed missions. In a statement, USPS revealed that the six Canoo vans it obtained in 2024 for evaluation purposes were removed from service after the company completed its assessment. The postal service confirmed it has no plans to invest further in Canoo technology.

The decision by these high-profile agencies reflects a broader skepticism about Canoo’s operational reliability. NASA specifically cited the company’s inability to meet its ongoing operational requirements as the reason for the switch. For USPS, the evaluation revealed limitations that made the vehicles unsuitable for large-scale deployment. These setbacks highlight the difficulties facing electric vehicle manufacturers when government customers—who demand reliability, service continuity, and financial stability—have access to alternative solutions.

Tony Aquila’s Last-Minute Rescue Attempt and Asset Sale

Prior to filing for bankruptcy, Canoo struggled for years to establish a viable market for its electric vehicles despite numerous announcements and partnerships. When the company’s financial troubles became insurmountable, former CEO Tony Aquila stepped in with a $4 million offer to acquire Canoo’s assets in early 2025. Aquila stated that his primary motivation was to fulfill Canoo’s obligations to government contractors, suggesting he believed the company’s intellectual property and contracts held value.

However, questions linger about whether Aquila ever contacted NASA or USPS to discuss ongoing support for their vehicles. Neither agency provided information about such communications, and Aquila and his legal team declined to respond to inquiries. In April 2025, a bankruptcy judge approved the asset sale to Aquila, but the approval process revealed competing interests and controversy surrounding the transaction.

Competing Bidders Question the Bankruptcy Process

The Canoo bankruptcy attracted significant interest from multiple parties eager to acquire the company’s intellectual property and assets. According to the bankruptcy trustee, up to eight groups signed non-disclosure agreements to evaluate Canoo’s technology and prototypes. Several came close to submitting bids, including Harbinger, a California-based electric truck manufacturer founded by former Canoo employees, and Charles Garson, a UK-based financier.

Harbinger accused Canoo’s bankruptcy trustee of showing favoritism toward Aquila by accepting his offer without broadly marketing the assets to other potential buyers. Garson reportedly expressed willingness to pay up to $20 million for the assets but was deemed to have submitted his bid too late to be considered. The trustee and Canoo’s legal team maintained that Aquila’s offer was the most reliable option. They also suggested that at least one other potential buyer raised concerns about foreign ownership in relation to Canoo’s government contracts with NASA, USPS, and the DOD, complicating the sales process.

The saga surrounding Canoo’s bankruptcy underscores the challenges facing emerging electric vehicle manufacturers and the risks inherent in government procurement of cutting-edge technology. When startups fail to deliver or demonstrate financial instability, even bold government endorsements cannot save them—and neither can last-minute rescue attempts by former executives.