Written by Cláudio Afonso | LinkedIn | X
EV startup Canoo Inc. is facing a lawsuit from Dana Limited, a key supplier of fully integrated drivetrain and electrified propulsion systems, alleging delays and misrepresentations in Canoo’s production timelines.
The supplier claims that “Canoo’s production and work under the Agreement was significantly delayed” causing a major impact on its financials.
Even after the termination of the contract, Dana claims Canoo “has continued in its refusal to pay amounts” despite its “efforts to negotiate a resolution of the parties’ dispute in good faith”.
Last Friday, Canoo said it withdrew its guidance for revenue, manufacturing run rates, as well as the production and delivery of vehicles for 2024 and subsequent periods.
Filed last week in Los Angeles Superior Court, the lawsuit claims that Canoo made overly optimistic projections regarding the launch of its EVs leading to financial damages for Dana.
On February 11, 2022, both parties signed a Development and Supply Agreement for the development and supply of “certain automotive electric vehicle parts and/or assemblies.”
Two years later, in April 2023, Canoo and Dana amended the Development and Supply agreement.
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According to the lawsuit, Canoo was “obligated to work jointly with Dana to “design, develop and deliver a drive assembly for the Canoo ‘Lifestyle Vehicle’ and the ‘Lifestyle Delivery Vehicle[‘] programs,” which are jointly referred to as “the Program,” Dana stated in the lawsuit.
Dana claimed that the EV startup failed to pay $1 million before June 15, 2023, $4.3 million to Dana until September 15, 2023, and another $4.3 million payment before November 15, 2023.
The supplier said it issued multiple notices to Canoo regarding material breaches of their agreement, including demands for overdue payments, with written notices dated July 5, 2023, December 13, 2023, April 3, 2024, and August 2, 2024.
Below is the lawsuit document sent to EV.
Earlier this week, the company said on Thursday it secured approval for the final activation of its Oklahoma City operations as a Foreign-Trade Zone (FTZ) as it “scales production” for global customers.
Canoo said last Friday it signed an Equity Distribution Agreement with Northland Securities Inc. to sell up to $200 million of its common stock through an at-the-market (ATM) offering.
Written by Cláudio Afonso | LinkedIn | X
