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Walmart to buy vehicles from Canoo

by Serenah McKay | July 13, 2022 at 6:58 a.m.
A Canoo Lifestyles vehicle takes sharp turns around building poles at the Canoo car manufacturing plant in Bentonville on Friday, May 20, 2022. Canoo, the electric car maker planning on headquartering in Bentonville, showed off its new Lifestyles vehicle in Bentonville. (NWA Democrat-Gazette/Charlie Kaijo)

Walmart Inc. said Tuesday it has agreed to buy 4,500 electric vans from manufacturer Canoo to deliver online orders in a way that's environmentally sustainable.

Canoo Inc. said in a news release that it expects to start making its Lifestyle Delivery Vehicles toward year's end at its U.S. manufacturing plant in the MidAmerica Industrial Park in Pryor, Okla.

The vans are expected to start making deliveries for Walmart in 2023. A Walmart spokeswoman said the company "hasn't shared any information about which markets will be the first to receive the new vehicles."

However, she said Walmart will conduct deliveries in the Dallas-Fort Worth area in coming weeks "to ensure the way we've configured the vehicle interiors meets the needs of our associate delivery drivers."

The deal includes an option for Walmart to buy up to 10,000 of the all-electric vehicles. Neither company said how much Walmart will pay for the vehicles, but Canoo said in a May earnings call that its pod-like Lifestyle Vehicles would have a targeted price of $34,750 to $49,950.

Canoo's Lifestyle Delivery Vehicles will help Walmart keep expanding its last-mile delivery fleet in a sustainable way, said David Guggina, senior vice president of innovation and automation for Walmart U.S.

One of Walmart's sustainability goals is to run a zero-emissions freight and delivery fleet by 2040.

The retailer said in January that it was buying 5,000 electric delivery vans from General Motors subsidiary BrightDrop. These vehicles are also expected to hit the road for Walmart next year.

Walmart said at the time that it planned to use the BrightDrop vans as part of its InHome delivery service, in which Walmart employees deliver fresh groceries and everyday essentials directly to customers' refrigerators.

Canoo's Lifestyle Delivery Vehicles are engineered for high-frequency stop-and-go deliveries and speedy vehicle-to-door dropoff, the company said.

Besides delivering online orders from groceries to general merchandise, Canoo said, the vehicles could potentially be used for Walmart GoLocal, the retailer's delivery-as-a-service business.

Canoo has said since November that it is moving its headquarters and some of its production to Walmart's hometown of Bentonville. However, Canoo has yet to reveal the address or size of the Bentonville facility.

A Canoo spokesman said the company provides updates about manufacturing in its quarterly earnings calls. Canoo's first-quarter statement this year said it leased an "industrialization facility" in Bentonville on Feb. 1, but no address is given.

Canoo's stock trades on the Nasdaq, where its shares closed Tuesday at $3.63, up $1.26, or 53.2%. The company's shares have traded between $1.75 and $13.35 over the past year.

The company posted a net loss for this year's first quarter, which ended March 31, of $125.4 million, compared to a net loss of $15.2 million in the same period a year earlier.

Canoo, which also operates in California and Texas, has more than 940 employees.

In response to a question about reports that Canoo laid off 58 employees on Friday, the spokesman said that so far this year, the company has "separated" 58 workers, promoted 119 and hired 313 people.

"We are a performance-based culture and make decisions appropriate to the times and the needs of the company to execute our plans," the spokesman said.

Print Headline: Walmart to buy Canoo electric vehicles


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