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Canoo gets lifeline from Walmart after moving HQ to the retailer’s neck of the woods

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A timely deal for the EV manufacturer as it’s running out of cash

Image: Canoo

Walmart is here to throw a life preserver to ailing EV manufacturer Canoo. It’s taking the form of a very helpful order of 4,500 all-electric delivery vehicles from the big box retailer / e-commerce giant, with the potential to buy up to 10,000. Walmart and Canoo became neighbors last year when Canoo’s headquarters moved out of California and onto Walmart’s turf in Bentonville, Arkansas — but the companies did not make any public deals at the time.

“We are proud to have been selected by Walmart,” said Canoo chairman and CEO Tony Aquila. Aquila says that Walmart’s size gives a strategic advantage in “today’s growing ‘need it now’ mindset,” and combined with Canoo’s American-made “lifestyle delivery vehicles,” it has a “winning algorithm to seriously compete in the last mile delivery race, globally.” Aquila was a Canoo investor before being elevated to chairman and signed on as CEO right before the company went public in 2020 by merging with a SPAC.

The purchase is a step toward Walmart’s claimed goal of going carbon neutral by 2040, and it’ll certainly need to do more to offset the fact that it ranked as the top maritime greenhouse gas polluter in a report on the largest importers via shipping in the US last year. But the Canoo order isn’t Walmart’s only EV resource — in January, it also reserved 5,000 all-electric delivery vans from GM-backed BrightDrop.

Walmart’s delivery services have been growing through the pandemic, and the company says that it has the capacity to perform same-day deliveries for many products to 80 percent of the US population. With Walmart’s acceleration of its InHome delivery services that include direct-to-fridge deliveries in even more states and the push to provide its GoLocal delivery services for other companies, it’s going to need all the delivery vehicles it can get.

In an earnings call in May, Canoo execs expressed doubt about its future, but a growing relationship with Walmart might set the EV company’s ship in the right direction. “We’re encouraged that by being located in close proximity to the Canoo headquarters, we have the advantage to collaborate and innovate in real-time as well as the opportunity to aid in the creation of manufacturing and technology jobs here in our home state of Arkansas,” said Walmart SVP of innovation and automation David Guggina.

Canoo began as a California start-up, Evelozcity, in 2017, and soon after it was renamed in 2019, it revealed the VW-style microbus EVs it planned to make available through a subscription. The company has gone through a lot since then, shedding a deal with Hyundai, losing executives, and not only missing out on a deal with Apple but also losing its former CEO and co-founder to Apple. And today, a report from Bloomberg reveals Canoo had a battery fire incident that set a company trailer ablaze — its second fiery incident within a year. This company sometimes feels a little on fire, in a very bad way. Maybe it can keep some of those fires at bay with this latest cash from Walmart.