Walmart strikes deal with tech startup Canoo to purchase new lifestyle electric vehicles

July 18-24, 2022

By Daily Record Staff

Walmart gave big lift last week to a neighboring Bentonville startup when it announced that it had inked a definitive agreement to purchase a fleet of electric vehicles that will begin delivering online orders to consumers by next year.

The July 12 deal with Bentonville-based Canoo calls for Walmart to purchase 4,500 of the company’s Lifestyle Delivery Vehicle (LDV), with the option to purchase up to 10,000 additional units. The vehicles will be used to deliver online orders in a sustainable way which will also contribute to Walmart’s goal to achieve zero-emissions by 2040, officials said.

While the LDV is expected to begin hitting the road in 2023, the companies plan to kick-off advanced deliveries to refine and finalize vehicle configuration in the Dallas Fort Worth metroplex in the coming weeks. Once available, Canoo’s electric vehicles will be driven by Walmart associates and used to deliver online orders, from groceries to general merchandise, as well as the potential to be used for Walmart GoLocal, the retailer’s delivery-as-a-service business.

“We’re thrilled to continue diversifying our last mile delivery fleet with Canoo’s unique and sustainably focused all-electric technology which will provide our associates with safe, ergonomic delivery vehicles,” said David Guggina, senior vice president of innovation and automation for Walmart’s U.S. operations.  “Today, the closest Walmart to customers is right in their pockets — it’s the Walmart app. 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.”

“We are proud to have been selected by Walmart, one of the most sophisticated buyers in the world, to provide our high-tech, all-electric, American made Lifestyle Delivery Vehicle to add to their impressive logistics capabilities. Our LDV has the turning radius of a small passenger vehicle on a parking friendly, compact footprint, yet the payload and cargo space of a commercial delivery vehicle. This is the winning algorithm to seriously compete in the last mile delivery race, globally,” added Canoo Chairman and CEO Tony Aquila. “Walmart’s massive store footprint provides a strategic advantage in today’s growing ‘Need it now’ mindset and an unmatched opportunity for growing EV demand, especially at today’s gas prices.”

The deal for Canoo comes at a perfect time as the EV startup firm has struggled to gain momentum since it moved its headquarters to northwest Arkansas in late 2021. Formerly headquartered in Justin, Texas, Canoo moved its corporate offices and industrialization facility to Bentonville in November thanks to support from Gov. Asa Hutchinson and the state Economic Development Commission.

As part of the move, Canoo also said the company’s research and development (R&D) center would be relocated to Fayetteville and support advances in vehicle electronics and powertrain. These and other investments will bring at least 545 high paying jobs to Benton and Washington counties. 

A few months later in February 2022, Gov. Asa Hutchinson announced the creation of the state’s first Future Mobility Advisory Council (FMAC), a task force committed to attracting businesses, innovators and creatives to Arkansas to aid in developing the state into a global giant in next-generation transportation.

During a Feb. 22 press conference at the Governor’s Mansion with Secretary of State Mike Preston, Hutchinson signed an executive order to create the new advisory council. Today, that council includes representatives from Walmart, Canoo, J.B. Hunt, Entergy, Arkansas Trucking Association, Arkansas Auto Dealers Association, the University of Arkansas, Southern Arkansas University Tech and several state agencies.

At the time, Hutchinson applauded Canoo’s election of Northwest Arkansas for its corporate headquarters, technology hub and development facilities, saying the project is an excellent example of why our state has put so much effort and energy into computer science education and workforce training and development in recent years. “As a leader in technology with a talent pool that prioritizes innovation, hard work, and entrepreneurship, Arkansas shares many of the values that Canoo embodies, making this partnership a natural fit,” he said.

However, Canoo finances hit the skids when the Arkansas EV startup announced a net loss of $125.4 million in the first quarter of 2021. In a conference call with investors and Wall Street analysts, Canoo officials warned there was “substantial doubt about the company’s ability to continue as a going concern.”

Those financial red flags have caused the company stock price to slide 84.3% from a high $11.97 to a low of $1.88 on July 1. Since the Walmart announcement on July 12, Canoo has nearly doubled to $3.93 at the close of trade on July 13, a gain of 109%.

According to Canoo officials, the LDV is built on a proprietary multi-purpose platform (MPP) architecture that integrates the motors, battery module and other critical driving components. The LDV has a last mile delivery optimized cabin and customized cargo space and will utilize true steer by wire technology, reducing moving parts and cabin intrusion, resulting in more usable interior space, better driver ergonomics and the addition of a panoramic window to improve road visibility.

The LDV is engineered for high frequency stop-and-go deliveries and speedy vehicle to door drop-off, including grocery and food/meal delivery. Its customized interior is designed for small package delivery, at competitive per stop economics. The modular design and 120 cubic feet cargo volume are adaptable to evolve with customer needs which contributes to a decreasing per unit investment over time.

For Walmart, the deal with Canoo continues the Bentonville retail giant’s efforts to expand its last-mile delivery services to get every day items to consumers’ doorsteps within a few hours. In late May, Walmart announced that it was expanding its DroneUp delivery network to 34 sites by the end of the year, providing the potential to reach 4 million U.S. households across six states – Arizona, Arkansas, Florida, Texas, Utah and Virginia. 

Nearly a year ago, Walmart first partnered with Virginia Beach, Va.-based drone startup to launch trial deliveries of at-home COVID-19 self-collection kits. DroneUp operates an on-demand drone delivery network that matches their database of more than 10,000 Federal Aviation Administration (FAA) certified pilots to missions nationwide. The expanded service will allow Walmart to deliver over 1 million packages by drone in a year.

Earlier in the fall of 2021, Walmart and Silicon Valley startup Gatik announced they were operating daily without a safety driver behind the wheel on its delivery route for Walmart in Bentonville, moving customer orders between a Walmart dark store and a Neighborhood Market in its fleet of multi-temperature autonomous box trucks.  

Photo Caption:

1. Canoo’s fully electric Lifestyle Delivery Vehicle (LDV) is an all-American commercial EV optimized for sustainable last-mile delivery.