Canoo under fire for private jet usage of its chairman

American EV startup Canoo paid $1.7 million for CEO Tony Aquila’s private jet bills, twice its total revenue last year. According to its earnings report released this week, Canoo lost $302 million in 2023 and is urgently looking for new investors.

Aquila, who is also the company’s chairman, owns about 14% of Canoo. In 2022, Canoo spent $1.3 million on his air travel. Aquila’s hefty travel bill for last year included “air travel expenses for either, at our option, first-class airfare or the business use of his private jet,” the company said in the filing.

On its website, Canoo pitches the sustainability of EVs and says it wants to create “a Net Positive transportation economy” by providing zero-emission transportation for all sorts of commercial purposes.

A study by the NGO Transport & Environment (T&E) found that private jets are 5 to 14 times more polluting than commercial planes per passenger.

Recently, there was a press release from Wall Street securities and shareholder law firm Moore Law citing its investigation into a potential class action lawsuit against Canoo for “wastefully spending significant money on private jets.”

In need of money

This private jet story comes at a really bad time for Canoo, an EV transportation start-up that is facing “a growing concern for management” in finding new funding. “We believe that our existing cash resources and additional sources of liquidity are not sufficient to support planned operations for the next 12 months,” the company communicated.

“Our ability to continue as a going concern will depend on our ability to obtain additional capital,” the company added. According to Automotive News, Canoo has roughly six months left on working capital to cover its free cash flows. Canoo said it plans to raise more capital by pursuing equity and debt financing to fund expenditures. Canoo’s share value fell from $5.80 at the beginning of January to $2.47 last week.

Launched in 2017, the Texas-based company makes passenger vans, delivery vans for Walmart, and crew transport vehicles for NASA. Last year, Canoo started its first commercial fleet customer deliveries from its Oklahoma City manufacturing facility with a 20,000-unit run-rate production target.

Just last month, Canoo initiated a 1-for-23 reverse stock split to avoid being delisted on NASDAQ. Its stock surged a while after it received ‘Foreign Trade Zone’ approval for its Oklahoma facility. At that facility, Canoo’s rugged new EV pickup, dubbed American Bulldog, was spotted being tested.