Canoo, the beleaguered U.S. electric vehicle (EV) startup, is encountering a grim holiday period. As reported by *TechCrunch*, the firm has placed its remaining workforce on a “mandatory unpaid hiatus,” starting this past Monday, with no definitive timeline for their return. Although year-end shutdowns are common in many businesses, Canoo’s action appears to be driven more by financial turmoil than seasonal spirit.
The company has been dealing with significant economic difficulties, including several furloughs and a dependence on emergency financial support. Recently, Canoo secured millions from its CEO Tony Aquila’s private equity firm, AFV Management Advisors, in an effort to remain viable.
### Employees Informed of Unpaid Hiatus
According to *EV*, Canoo notified its employees of the required unpaid leave via email last Friday. Staff members were informed that they would receive updates through their personal email addresses in early January. By the end of that same day, access to Canoo’s internal systems was said to be suspended.
“We regret the timing of this notice,” stated the email, as referenced by *EV*. “We encourage you to use this period for a restful and enjoyable holiday season with your family.” *Mashable* attempted to contact Canoo for a statement but did not receive an answer, likely due to the reported leave.
### Furloughs and Factory Closures
Last week, Canoo revealed it had placed 82 employees on furlough and temporarily closed its factories in Oklahoma while trying to secure additional funding to continue its operations. This followed a 12-week furlough of 30 Oklahoma factory workers announced back in November.
“We are sorry to have to place our employees on furlough, especially during the festive season, but we find ourselves without options at this stage,” the company stated in a short announcement. “We remain hopeful to bring them back to work soon.”
### A Troubled Legacy
Canoo’s current difficulties are merely the most recent in a string of challenges. In recent months, the company has experienced several notable executive exits, including the last co-founder. It is also contending with a number of lawsuits, some alleging unpaid obligations and breaches of contract.
Financially, the outlook is grim. Last month, Canoo revealed it had only $700,000 in cash reserves, with its stock trading at a mere $0.086 as of this report. The firm reported a staggering $300 million loss in 2023 while bringing in just $886,000 in revenue. Significantly, it spent double that amount solely on CEO Tony Aquila’s private jet travel.
### State Financial Assistance at Risk
Canoo had earlier secured up to $100 million in performance-related state incentives from Oklahoma, intended to be distributed throughout a decade. However, the Oklahoma State Department of Commerce disclosed that it has only disbursed $1 million to Canoo so far and is ready to “explore avenues to recover public funds” if necessary. A former employee recently told *News 4* that Canoo never produced vehicles in Oklahoma and that most employees did not move to the state.
### Industry-Wide Issues
Canoo is not the sole EV manufacturer grappling with challenges this month. Tesla, for example, momentarily paused Cybertruck production in early December, directing workers at its Austin facility to remain home for three days.
As Canoo’s future teeters on the edge, the company’s struggles underline the larger issues faced by the EV sector, where ambitious startups frequently confront steep financial and operational challenges. Whether Canoo can obtain the necessary funding for survival remains uncertain.