Government Pullback Signals Broader Electric Vehicle Sector Challenges: Canoo Case Study

The collapse of Canoo’s electric vehicle venture offers a stark lesson in the risks of early-stage EV adoption in government procurement. Despite initial enthusiasm from major U.S. agencies, both NASA and the United States Postal Service have halted use of Canoo’s electric vans, abandoning the startup entirely after it filed for bankruptcy in early 2025. The reversal exposes critical gaps in the electric vehicle industry’s infrastructure and raises questions about whether government agencies should rush into partnerships with unproven EV manufacturers.

The Government Phase-Out of Canoo Electric Vehicles

NASA’s experience with Canoo’s electric vehicle lineup illustrates the operational challenges facing emerging EV companies. In 2023, the space agency purchased three Canoo electric vans to transport astronauts to launch pads for Artemis lunar missions. Yet within months, NASA discovered that Canoo could not meet the mission’s operational requirements. By October, NASA switched to leasing Airstream’s “Astrovan,” a purpose-built vehicle designed in partnership with Boeing for crewed space operations.

Similarly, the U.S. Postal Service ended its electric vehicle trial program. USPS obtained six Canoo electric vans in 2024 to evaluate their suitability for mail delivery operations. After completing its assessment, USPS determined that the electric vehicles did not meet its needs and announced it would not pursue further investment. The postal service released no details about the evaluation outcomes or specific performance failures.

The Department of Defense also received at least one Canoo demonstration unit. When contacted about its continued use, the DOD offered no response, leaving the status of that electric vehicle unclear.

Bankruptcy and the Failed Asset Sale Competition

Canoo’s financial deterioration culminated in a bankruptcy filing in January 2025. The startup’s inability to produce electric vehicles at scale and secure customers had drained its resources. Shortly after the filing, Tony Aquila, Canoo’s former CEO, proposed acquiring the company’s assets with a $4 million bid. Aquila publicly stated that supporting existing government contracts for electric vehicles remained his primary motivation for the purchase.

Yet questions persist about whether Aquila ever engaged with NASA or USPS to discuss ongoing support for their electric vehicles. Neither government agency confirmed any such discussions, and Aquila declined to respond to inquiries on the matter.

A bankruptcy judge approved Aquila’s asset purchase in April 2025, effectively concluding the sale. The timing and terms raised eyebrows among other interested parties, however.

Multiple Bidders and Questions of Fair Process

The bankruptcy trustee disclosed that up to eight groups signed non-disclosure agreements to review Canoo’s intellectual property, designs, prototypes, and equipment. Several came close to submitting competing bids for the electric vehicle company’s assets.

Harbinger, a California-based electric truck manufacturer founded by former Canoo employees, emerged as a vocal challenger. Harbinger accused Canoo and the bankruptcy trustee of hiding assets and claimed that preferential treatment was shown to Aquila’s offer without broader marketing of the assets to potential buyers of the electric vehicle manufacturer.

Charles Garson, a United Kingdom financier, also indicated serious interest. Garson reportedly offered up to $20 million for Canoo’s assets, but the court ruled that his bid arrived too late. The trustee and Canoo’s legal team defended Aquila’s selection, arguing his offer was the most reliable path forward. They also suggested that one anonymous bidder may have faced obstacles due to concerns about foreign investment in U.S. defense-related contracts—a significant issue given Canoo’s existing work with NASA, USPS, and the Department of Defense.

Both Harbinger and Garson refused to comment publicly on the auction proceedings, leaving the full details of the competitive process shrouded in uncertainty.