As hybrid vehicles have become pretty much routine, the acceptance of and demand for 100% electric-powered vehicles is increasing rapidly. EVs now come in a growing range of makes, models, shapes, sizes, and purposes. Economy cars like the Kia Niro EV and the Hyundai Kona electric appeal to budget-minded and environment-conscious folks. Luxury EVs, which began with Telsa in 2008, are now available with such prestigious nameplates as Porsche, Mercedes, and BMW, along with new rides on the block like Lucid and Rivian. Once-notorious gas guzzlers like Corvette and Mustang are actually exceeding in their EV incarnations the neck-snapping horsepower they flaunted as 1970s muscle cars.
One of the more recent developments in the use of all-electric vehicles is commercial transport. As the potential for long-distance travel has expanded and charging becomes more available, semi-trucks by Freightliner, Volvo, MAN, and Scania are beginning to appear. And after the goods hauled by big rigs are delivered to retail warehouses, they are increasingly being delivered to customers without a drop of fossil fuel being needed. In the industry, that final stretch is known in the industry as the “last mile.”
With online shopping and home delivery becoming more and more a part of our everyday lives, there are plenty of big-name players in the race to produce van-like vehicles to travel that last mile to awaiting customers. With options that include Ford’s E-Transit, Chevrolet and GMC’s electric vans, Kia’s Mid and Large PBV, Ram’s ProMaster Electric, and, of course, Rivian’s Amazon Prime Van, the choice for retailers and couriers has become quite extensive.
About 10,000 units of the Rivian Amazon electric van , called Rivian EDV, should be on the streets by the end of 2022. This is part of Amazon’s 100,000-unit order, which will be completed by 2030.
And then there’s Walmart. The iconic American retailer has chosen to place its bets on an Arkansas-based public EV company, Canoo. Walmart agreed in June 2022 to buy 4,500 all-electric Lifestyle Delivery Vehicles to deliver online orders, with the option to purchase as many as 10,000.
Walmart proudly announced the agreement on its corporate website:
BENTONVILLE, Ark., July 12, 2022 — Walmart (NYSE: WMT) has signed a definitive agreement with Canoo (NASDAQ: GOEV), a high-tech advanced mobility company, to purchase 4,500 all-electric delivery vehicles, beginning with the Lifestyle Delivery Vehicle (LDV), with the option to purchase up to 10,000 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. 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. Canoo added:
“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,” said Tony Aquila, investor, chairman and CEO of Canoo. “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.”
Canoo shares doubled the day after the agreement was signed, leaping $2.45 to $4.84 at 9:35 a.m. in New York, valuing the company at about $1.2 billion. Its market capitalization was still down from about $4.8 billion in late 2020, when the company went public by merging with a special purpose acquisition company.
But, according to a Fortune magazine article, whether or not that deal will come to fruition still remains to be seen.
An August 29, 2022 Fortune report describes the start-up company as “hanging by a thread” and “a mess under the hood.”
Canoo’s Q2 2022 earnings report claimed that the company has “over $1 billion” in its sales pipeline. But it reported a net loss of $164.4 million, up from $112.6 million in Q2 of last year.
On the August 8th earning call, interim CFO and chief accounting officer Ramesh Murthy, who has been known to compare himself to Elon Musk, had described the “road to profitability,” saying “It’s becoming more clear to everyone that our philosophy on cash and access to capital is in line with what a technology-driven company would do. We are milestone and event focused on how we access capital on our road to profitability. By focusing on milestones and key events, we can drive sustainable value to the company and all our stakeholders.”
Fortune also reported that “Canoo had just recently signed an agreement with hedge fund Yorkville Advisors to sell up to $250 million worth of its shares at a discount to their already depressed market price. The Securities and Exchange Commission was investigating the company over its 2020 SPAC merger, and the company was tied up in three legal spats, including two class action lawsuits from retail investors in its shares. Indeed, right there in an SEC filing from March 31 Canoo itself had said it might not make it another year.”
There are more and more manufacturers and vehicles to choose from for last-mile deliveries. Walmart’s choice is especially interesting.