Electric vehicle startup Canoo has taken a drastic measure to stay afloat, placing its entire staff on a "mandatory unpaid break" through at least the end of the year. According to a company email obtained by TechCrunch, employees will be locked out of Canoo's systems by the end of Friday, with their benefits continuing through the end of this month. This move comes just days after the company furloughed dozens of employees without pay, further fueling concerns about its financial stability.

The news is the latest in a series of setbacks for Canoo, which has been struggling to secure capital to continue its operations. Last week, the company announced that it was idling its Oklahoma factories and furloughing employees while it worked to finalize securing the necessary funding. The situation is dire, with Canoo reportedly having only about $700,000 left in the bank as of last month.

In an effort to attract new investors, Canoo also announced a 1-for-20 reverse stock split, effective December 24th. The company claims that this consolidation aims to keep its stock listed on the Nasdaq exchange and appeal to "a broader group of institutional and retail investors." However, the move may be too little, too late, as analysts have warned of Canoo's risk of insolvency since 2022.

Founded in 2017, Canoo's initial vision was to sell electric vans and trucks to adventure-seeking customers. However, the company has primarily focused on producing vehicles for the US government. Despite its efforts, Canoo has lost a steady stream of executives, including all of its founders, CFO, and general counsel. The company's struggles have been well-documented, with The Verge's Andrew Hawkins noting last year that Canoo has been teetering on the edge of running out of cash since 2022.

The mandatory unpaid break for all employees raises serious questions about Canoo's ability to recover from its financial woes. As the company's ship continues to sink, it remains to be seen whether it can secure the necessary funding to stay afloat. One thing is certain, however: Canoo's EV dreams are in jeopardy, and the future of the company hangs in the balance.

The implications of Canoo's struggles extend beyond the company itself, highlighting the challenges faced by EV startups in a competitive market. As the industry continues to evolve, it remains to be seen which companies will emerge as leaders and which will falter. One thing is certain, however: the fate of Canoo serves as a cautionary tale for EV startups struggling to stay afloat.