Canoo's Electric Dreams Spark Legal Nightmares: Supplier Lawsuits and Leadership Exodus
Electric Vehicle Startup Canoo Faces Legal Challenges Amid Leadership Changes
Electric vehicle startup Canoo is encountering new obstacles as it faces two lawsuits from suppliers related to its electric vehicle drivetrains. The legal challenges come on the heels of a major company reorganization and the departure of its chief technology officer.
Adding to the company’s woes, Christoph Kuttner, senior director of advanced vehicle engineering and the last remaining co-founder, has also left Canoo. Kuttner was part of the original team that established the company in late 2017 after splitting from Faraday Future. This departure continues a trend of co-founders leaving since Canoo transitioned from a private startup to a publicly traded company in late 2020.
The two lawsuits, filed in September in Oakland County Circuit Court, Michigan, highlight the financial strain on the EV startup. Jing-Jin Electric North America (JJE), contracted to design and build electric motors for Canoo’s vehicles, claims the company owes more than $1.4 million for motors as of August 2023. Despite a repayment plan agreed upon in November 2023, with Canoo making initial payments totaling $971,662.23, payments have since stopped, leaving an outstanding balance of $446,692.77.
In a separate lawsuit, Dana Limited alleges that Canoo failed to make two $4.3 million cost recovery payments despite multiple notices through late 2023 and into 2024. The payments were part of an agreement to co-design and develop a drive assembly, which included compensation for costs if Canoo’s vehicle production was delayed by more than three months.
As Canoo shifts its focus from California to Texas and Oklahoma, while also seeking customers in the U.K. and Middle East, the company is operating on a tight budget. As of June 30, 2024, Canoo reported just over $19 million in total cash, raising concerns about its financial stability.
Neither Kuttner nor Canoo have provided comments on the situation, leaving industry observers speculating about the company’s future in the competitive electric vehicle market.
