Walmart Inc.’s deal backing an electric-vehicle startup Canoo Inc. has some strings, including a provision preventing sales to rival Amazon.
The retail giant’s agreement to purchase as many as 10,000 battery-powered vans from Canoo Inc. provides a lifeline for the fledgling auto manufacturer. The caveat blocking sales to Amazon was disclosed in a securities filing on Wednesday, July 13.
The language says that for the duration of the pact, Canoo “will not enter into any agreement for any services involving the design, manufacture, consult, advice, lease, or sale of EVs to, or issue any equity, equity-linked or debt securities of any type, or enter into any agreement for the purpose of transferring control of the Company to, Amazon.com, Inc., its subsidiaries, or affiliates.”
The document also indicated that Walmart’s purchase order is non-binding.
Amazon already has an agreement with another EV startup, Rivian Automotive Inc., to buy as many as 100,000 electric vans. That deal gives Walmart priority over all other potential customers. In striking a similar deal with Canoo, albeit for a fraction of the volumes, Walmart is betting a competing technology wins out in the emerging business for battery-powered delivery fleets. It has also placed an order for EVs with established automaker General Motors Co.
Big order for startup Canoo
The Walmart project begins with an order for 4,500 vans, with an option for up to 10,000. Walmart will be the first to take delivery of vehicles Canoo expects to begin producing in the fourth quarter. The companies said the vans will hit the road next year and support the U.S. retailer’s growing ecommerce business. Canoo recently moved its headquarters to Walmart’s hometown of Bentonville, Arkansas.
The agreement with Canoo is the latest in a series of moves by Walmart into electric and autonomous vehicles. The retailer announced in January it was reserving 5,000 electric delivery vans from General Motors Co.’s BrightDrop, and it’s been working on making autonomous deliveries with the Silicon Valley startup Gatik since 2019.
Canoo will send some pre-production vehicles to Walmart in the coming weeks to “refine and finalize” a configuration for the Dallas-Fort Worth area.
The startup has dealt with a raft of executive and staff departures since its SPAC merger. Canoo also was tapped by NASA in April to supply electric vehicles that will ferry astronauts to the launchpad for future Artemis missions.
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