Walmart is ready to drag another company into its rivalry with Amazon with the deal it signed with Canoo to purchase 4,500 units of its EV. The agreement forbids the startup from selling the same delivery vehicle to Amazon.
Canoo obviously had no choice but to accept the restrictive deal since it already warned it was short of cash and may not be able to stay in business last quarter.
Walmart will take delivery of 4,500 Canoo vehicles, but that number can go up to 10,000 units, according to the regulatory filing by Canoo. The vehicles will be built in Oklahoma starting next year.
News of the deal was enough to send Canoo’s shares rising by more than 50 percent, although it has since shed 1.65 percent. The current price is still 56 percent smaller than it was a year ago.
Meanwhile, Amazon is not lining up to buy Canoo’s electric vehicles. It has a contract in place with Rivian, in which it is an investor, for 100,000 electric delivery vans. Amazon has also joined the Ram ProMaster electric van queue as the first customer, with a launch expected in 2023.
Just like Amazon and Rivian, Walmart may become a significant shareholder in Canoo, owning up to 20 percent of its stock.
However, Walmart has booked 5,000 electric vans from General Motor’s BrightDrop, to help it reach its goal of a zero-emission fleet by 2040. Walmart Canada is also buying at least 130 units of Tesla’s upcoming Semi truck.