Canoo Shares Soar after Walmart Orders 4,500 EVs

A virtually unknown electric vehicle maker recently made the news after retail giant Walmart ordered more than four thousand of its EVs. Canoo, an EV company based in Arkansas, released a statement saying that it had signed a definitive agreement with Walmart to deliver 4,500 fully electric vans as part of efforts to achieve zero-carbon emissions and grow its delivery network by 2040.

Although the retailer’s plans to electrify its delivery network are public knowledge, Walmart’s preferred EV maker isn’t known to many. For the most part, the general public has been interested in companies that make passenger electric vehicles such as Tesla, General Motors, and startups such as Lucid. But the passenger EV segment faces significant challenges to growth, namely high initial costs and insufficient charging infrastructure.

Electric vans, however, show more potential for growth as part of company fleets. While a single buyer may struggle to raise tens of thousands of dollars to purchase an EV, fleets can mobilize significant resources and buy EVs in bulk. Furthermore, they can get around the charging infrastructure problem by installing chargers at a central location where the entire fleet could return to charge overnight.

Walmart will be the first company to receive a shipment of the Arkansas-based EV maker’s lifestyle delivery vehicles (LDV), which are expected to start delivering Walmart products in 2023, Canoo said in a statement. The carmaker, which describes itself as a high-tech advanced mobility company on its website, said that the agreement gives Walmart the option to purchase an additional ten thousand electric vans.

According to Canoo chairman and CEO Tony Aquila, its LDVs have a compact footprint and the cargo space of the average commercial delivery vehicle, making them uniquely tailored to Walmart’s expansion and green-energy goals. Optimized for last-mile deliveries, Canoo’s LDVs feature 120 cubic feet of cargo volume and are designed in a way that reduces moving parts, increases driver ergonomics and allows for speedy deliveries.

Canoo’s shares shot up by more than 50% in the wake of the announcement, a welcome change in fortune for a company that had warned its inventors just two months ago that it may not have enough cash reserves to continue doing business. Although Canoo still hasn’t released an EV to the market, it is currently taking preorders for deliveries later this year. The Arkansas-based company has also signed a contract with NASA to deliver all-electric vehicles for the Artemis mission by 2023.

A spokesman from Walmart said that the agreement with Canoo is part of the retailer’s efforts to expand its last-mile delivery fleet. Although both Walmart and Canoo haven’t revealed the value of the agreement, Canoo’s lifestyle delivery vehicles retail at $34,750 per unit. They also revealed that the retail giant has also signed agreements with Ford and GM subsidiary BrightDrop for 1,000 ETransits and 5,000 EVs respectively.

As more fleets acquire electric vehicles, mass adoption by ordinary motorists is likely to grow, all to the benefit of EV manufacturers such as Fisker Inc. (NYSE: FSR).

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