Walmart to buy electric vehicle fleet for last-mile deliveries

Walmart has a definitive agreement to buy 4,500 electric delivery vehicles from Canoo, the two companies announced Tuesday morning.

• The EV maker revealed last year it was relocating its headquarters to Bentonville.

Why it matters: Farmers, contractors and delivery companies — not individual consumers — will lead America into the electric vehicle era, Axios' Joann Muller wrote earlier this year.

• Yes, and: Using EVs for last-mile deliveries — from store to door — will help Walmart get closer to its goal of zero emissions by 2040.

Details: Walmart will begin with Canoo's Lifestyle Delivery Vehicle (LDV), a commercial unit built for frequent stop-and-go travel.

• The LDV is designed for small package delivery and has 120 cubic feet of cargo space. That's comparable to a 2021 Chevy Tahoe, Ford Expedition Max or Toyota Sequoia.
• Canoo says the vehicle is modular, so Walmart can adapt it for specific needs.

Between the lines: Financial terms of the deal aren't being disclosed, but a contract Canoo has with NASA to build two rugged, custom astronaut transports is valued at nearly $150,000.

• Walmart has the option to purchase up to 10,000 Canoo units as part of the new agreement.

Flashback: The agreement may provide Canoo some needed juice.

• The publicly traded company warned investors in May that "substantial doubt exists about the company's ability to continue as a going concern," per a financial filing — meaning the EV maker needed more capital to stay afloat.
• And just recently, the company said its planned manufacturing plant in Pryor, Oklahoma, could be delayed, citing supply chain issues.

What they're saying: "By continuing to expand our last mile delivery fleet in a sustainable way, we're able to provide customers and Walmart+ members with even more access to same-day deliveries while keeping costs low," said David Guggina, senior vice president of innovation and automation at Walmart U.S.

What to watch: The companies will put the LDV into service in the Dallas-Fort Worth metro to finalize its configuration in "the coming weeks," Canoo said in a news release.

• It'll be 2023 before they're used more widely.

Disclosure: Reporter Worth Sparkman is a Walmart shareholder.