As Canoo Inc. faced collection lawsuits and warned investors it might not stay in business, Oklahoma gave the electric vehicle maker $1 million in cash incentives for jobs it created in the state. Oklahoma has also pushed back a deadline for Canoo to receive more incentive money, allowing the company more time to meet hiring goals. 

Canoo received its first $1-million incentive payment from Oklahoma after it announced it had created over 100 new jobs in the state in January. The money came from Oklahoma’s Quick Action Closing Fund, a pot of money intended for the governor to recruit new employers to the state. 

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Oklahoma’s incentives are all performance-based, meaning companies only receive payments for jobs and investment they have already created in the state, a spokesperson for the Oklahoma Department of Commerce said. 

“Companies do not receive taxpayer dollars until they meet certain requirements, and safeguards are built into contracts that allow the state to claw back money if a company falls below its performance threshold,” the agency said in a statement 

It’s unclear if recent worker furloughs at Canoo’s Oklahoma City factory will require the company to repay any of the $1 million in state money. 

Strapped for cash, Canoo furloughed 30 Oklahoma City factory workers for 12 weeks at the end of October. The furloughs represent 23% of the company’s factory workers, Canoo disclosed in a regulatory filing. 

Canoo’s contract with the Oklahoma Department of Commerce requires the company to keep at least 80% of the workers it hired for a minimum of 18 months or face clawbacks. Department of Commerce officials recently toured Canoo’s factory as part of a previously scheduled visit and have notified the company that it needs to meet the performance requirements in the contract, said Chase Horn, a spokesperson for the agency.

Canoo did not respond to written questions about the furloughs or the status of its state incentives. The company is scheduled to report financial results for the third quarter of the year on Wednesday. 

The Department of Commerce gave the company more time to reach hiring goals to receive additional state incentive payments earlier this year. 

Canoo’s 2023 Quick Action Closing Fund contract required the company to hire more than 350 people with an average annual wage of at least $60,512 by July 1 this year in order to get its next $2-million chunk of incentive money. But the company has been slow to ramp up production. The Department of Commerce signed a new deal with Canoo one day before the deadline, giving the company until July 2025 to meet the hiring goal for the incentives.

“It is the intention of the Oklahoma Dept. of Commerce to work with and support businesses to help find a means to success as a net-benefit for the state and the company,” a spokesperson for the Department of Commerce said about the revised incentive deal.

It’s the second time the Department of Commerce has reworked Canoo’s Quick Action Closing Fund contract. Canoo was initially eligible for up to $15 million in Quick Action Closing Fund money, but the agency reduced the potential award to $7.5 million in 2023 after the company missed a deadline to start construction on a  factory in Pryor. 

Canoo has also been hit with multiple collection lawsuits from vendors over the past year. The Frontier found six pending lawsuits filed against the company for past-due bills in Oklahoma, California and Michigan. 

Five former employees told The Frontier that Canoo lacked parts to build vehicles because it didn’t pay suppliers. Some workers didn’t want to be named because they were concerned about future employment options or said they had signed non-disclosure agreements with the company.

Canoo warned investors that there was “substantial doubt” it would be able to continue operations in May 2022. Canoo CEO and Chairman Tony Aquila has been helping provide financing to keep the business going. The company secured a $12-million revolving line of credit with AFV Management Advisors LLC earlier this month, another company that Aquila runs.  

Along with millions in promised cash incentives, Oklahoma also awarded Canoo a contract to provide electric vehicles to state agencies in 2022. State agencies have purchased three vehicles so far for $39,950 a piece. 

The Office of Management and Enterprise Services uses its Canoo cargo van for maintenance operations at state office buildings around the Oklahoma Capitol.  

The agency has no current plans to purchase any additional Canoo vehicles, said Christa Helfrey, a spokesperson Management and Enterprise Services said.

“The current cargo-style van, which only allows for two passengers, is proving to be resourceful for our current facilities management applications but is somewhat limited for applications in other areas,” Helfrey said in an email. 

A lack of charging stations has limited the use of the vehicles for two state agencies. 

The Oklahoma Department of Corrections initially used its Canoo to patrol the perimeter at a prison in Lexington.  

“It provided a quiet ride and an excellent panoramic view for the officers patrolling the outside of our facility,” Kay Thompson, a spokesperson for the Department of Corrections said in an email. 

But the agency eventually moved the vehicle to its administration building in Oklahoma City due to a lack of charging ports at the prison. The Department of Corrections now uses the Canoo for an IT team to transport computers and other tech equipment around the metro area, but has no plans to purchase more vehicles, Thompson said. 

The Oklahoma Department of Transportation uses its Canoo for public outreach and planning activities “within an appropriate radius from the ODOT central offices,” Jared Schwennesen, multi-modal division manager for the agency said in an email.

“As we learn more about the vehicle’s capabilities and range, we will be able to determine a suitable radius of operation around ODOT’s headquarters to maximize the utilization of this zero-emission mode of transportation.”

Gov. Kevin Stitt has been an outspoken supporter of providing Canoo with business incentives to create new jobs and diversify the state’s economy. He praised the state’s purchase of Canoo vehicles last year as a way to reduce government waste.

“As we find new efficiencies within the fleet, Canoo’s new Oklahoma-made electric vehicles align perfectly with our fleet modernization goals, and I couldn’t be more excited to see them on the roads,” Stitt said in a December 2023 press release. 

Stitt’s office did not respond to questions about Canoo’s state incentives or vehicle contract. 

Even though Canoo has not yet turned a profit or started large-scale manufacturing, the company has said it plans to create more than 1,300 jobs in Oklahoma. The electric vehicle startup announced in 2023 that it had incentive deals with the state of Oklahoma and the Cherokee Nation worth more than a combined $110 million over the next decade. Oklahoma City has pledged another $1 million in job creation incentives. 

But $1 million from Oklahoma’s Quick Action Closing Fund is the only state money the company has so far received. The Cherokee Nation and Oklahoma City both said they have not provided the company with any payments or other support.