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Canoo Walmart deal for 4,500 vans sends EV stock jumping

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Walmart to Purchase 4,500 Canoo Electric Delivery Vehicles to be Used for Last Mile Deliveries in Support of Its Growing eCommerce Business

Courtesy: Canoo | Walmart

Electric vehicle startup Canoo said Tuesday Walmart has agreed to purchase not less than 4,500 of its upcoming electric delivery vans, in a big win for the embattled vehicle maker.

Shares of Canoo were up greater than 70% in early trading after the news was announced.

Walmart has signed a “definitive agreement” to buy not less than 4,500, and possibly as many as 10,000, of its all-electric Lifestyle Delivery Vehicles, a small electric van designed for local delivery service, Canoo said.

Walmart is leaning on its 1000’s of stores to deliver online purchases quickly and at a lower costs — and compete with Amazon, an internet rival known for its speed. It has rolled out and expanded e-commerce services, including InHome, which delivers groceries on to customers’ fridges and Express Delivery, which drops purchases at shoppers’ doors in two hours or less. Unlimited home delivery of groceries can be a key perk of Walmart+, an annual membership service that the big-box retailer desires to grow.

But to expand those services, it needs more delivery vans. InHome is powered by an all-electric fleet.

Canoo marks the third major deal signed by Walmart for electric vans. Early this 12 months, Walmart reserved 5,000 electric vans from General Motors subsidiary, BrightDrop. It also bought 1,100 electric vans from Ford E-Transit, a few of which it’s already driving.

The massive-box retailer plans to make use of electric vans from all three firms for InHome and other local deliveries. It plans to extend the supply of InHome from 6 million to 30 million households by the tip of this 12 months, because it adds major metros like Los Angeles and Chicago.

The shift also comes at a time when fuel is weighing on Walmart’s profitability and making online deliveries dearer. Walmart said last week in a memo that it might charge some suppliers recent fees to move goods to its warehouses and stores.

Canoo’s vans can be built at its Oklahoma factory and are expected to start going into service next 12 months. Terms of the deal weren’t disclosed.

Canoo is considered one of several U.S.-based electric vehicle startups to have gone public via mergers with special-purpose acquisition firms, or SPACs. The corporate’s shares briefly surged to over $20 after its stock-market debut in late 2020, but have slid since co-founder and CEO Ulrich Kranz departed last 12 months.

As of Tuesday morning the stock was trading closer to $4 per share.

Correction: This story has been updated to reflect that the vans can be in-built Canoo’s factory in Oklahoma.

—Reuters contributed to this report.

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