Struggling EV startup Canoo needs to turn the tide. Will a well-timed Walmart deal be enough?

Canoo's electric vehicle
Canoo's electric vehicle.
Allen J. Schaben—Los Angeles Times/Getty Images

A lifeboat arrived Tuesday for Canoo, courtesy of its northwest Arkansas neighbor. Assuming all goes according to plan, it might just help keep the flagging electric automaker afloat for now.

Retail giant Walmart announced plans Tuesday morning to buy at least 4,500 delivery vehicles from the Bentonville-based EV company, a much-needed agreement that could jolt Canoo back on track. Investors immediately rallied behind the news, with Canoo shares skyrocketing 63% in mid-day trading.

The timing couldn’t be much better for Canoo, which has endured a brutal nine months. 

The company’s shares are down 82% from a late November peak, wrecked by Wall Street’s abandonment of unprofitable, upstart electric automakers. Canoo further scared investors in May by declaring in regulatory filings that “substantial doubt exists” about its ability to stay in business beyond one year. Canoo had just $105 million in cash on hand as of late March, barely enough to last one quarter.

CEO Tony Aquila stayed positive through the doldrums, pointing out in May that Canoo had $600 million in accessible capital. Still, the company didn’t have much to promote in terms of guaranteed pre-orders, and it remained at least one year away from anything close to mass production.

Enter Walmart. The nation’s largest company by revenue is expanding its product delivery footprint, aiming to keep up with top e-commerce rival Amazon. To that end, it has pledged to build out a fleet containing thousands of all-electric delivery vans, part of its commitment to reach zero emissions by 2040. (Walmart is also experimenting with drones and other delivery mechanisms.)

In a positive sign for Canoo, the EV company confirmed the 4,500 pre-orders are binding, with an option for Walmart to purchase another 5,500 delivery vans, according to TechCrunch. That stands in contrast to another high-profile EV deal, in which Amazon isn’t obliged to buy any of the 100,000 electric vans it pre-ordered from EV upstart Rivian. (Amazon also owns a minority stake in Rivian, so there’s some incentive for the company to follow through with the deal.)

On its face, a Canoo-Walmart partnership seems like a winner for the Natural State. But potholes still await, particularly for Canoo.

Most notably, the two sides have not yet released a written agreement for the purchase, which might expose some unappetizing fine print for Canoo shareholders. Financial terms also haven’t been disclosed, so it’s not immediately clear if or how the pact will impact Canoo’s short-term prospects for staying in business.

The deal also doesn’t appear to materially change immediate manufacturing pressures pummeling EV startups. 

Six months after Canoo bumped up its 2022 production target to 3,000 to 6,000 vehicles, Aquila sounded less than confident this spring about meeting that goal, disclosing on a May earnings call that “supply chain issues have worsened.” To make matters worse, the Tulsa World reported last week that Canoo’s Oklahoma production plant, one of two main assembly hubs, has been delayed due to the down equities market and high construction costs, among other factors. 

And while Walmart’s order signals some level of confidence in Canoo, the retail powerhouse isn’t hitching its wagon to the company quite yet. Before striking a deal with Canoo, Walmart ordered 5,000 electric vans from General Motors’ commercial EV unit, BrightDrop, which already has several high-profile customers.

If Canoo can push through its growing pains with an assist from Walmart, its future could be bright. The commercial EV market only figures to grow, particularly as Amazon, Walmart, and Shopify battle for e-commerce supremacy while fulfilling climate change commitments.

For the time being, though, Canoo is still paddling upstream.

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Jacob Carpenter


We’ll see you in court. Twitter called Elon Musk’s move to terminate his $44 billion agreement to purchase the company “invalid and wrongful” in a letter filed with the SEC on Monday. The response, which came public three days after Musk notified Twitter of his intention to back out of the deal, further cements the social media company’s commitment to executing the blockbuster agreement. Musk has said he suspects Twitter has made false statements about the prevalence of bot accounts on the platform—an accusation refuted by Twitter officials—and the misleading information gives him the legal right to scrap the deal.

Paying his penance. A former high-ranking Uber executive came forward publicly Monday as the whistleblower who leaked a trove of documents detailing unflattering business practices at the ride-hailing company. Mark MacGann, who served as Uber’s chief lobbyist for Europe, the Middle East, and Africa in the mid-2010s, unveiled himself as the source of records published Sunday by the Guardian and dozens of news organizations across the globe. MacGann said he shared the records, which showed Uber’s dismissal of laws and driver safety under former CEO Travis Kalanick, as a way of making amends for his behavior at Uber.

Doing some backpedaling. Peloton will stop in-house manufacturing of its signature stationary bikes and treadmills, abandoning a strategy that contributed to the at-home fitness company’s 92% stock price freefall over the past year, Bloomberg reported Tuesday. New Peloton CEO Barry McCarthy, who took over the company in February, said he plans to outsource product assembly to a longtime Taiwanese manufacturer. Peloton has spent hundreds of millions of dollars on domestic manufacturing operations, but those costs became burdensome when sales dived as customers returned to gyms and offices.

An EU coup. Semiconductor companies STMicroelectronics and GlobalFoundries jointly plan to spend about $5.7 billion to build a chip manufacturing plant in France, The Financial Times reported Monday. The announcement marks the latest semiconductor investment in the European Union, where lawmakers have committed roughly $50 billion in government subsidies to boost chip manufacturing. Switzerland-based STMicroelectronics and U.S.-based GlobalFoundries expect to fabricate chips used in cars, electronics, appliances, and factories.


Taking its shot. Amazon already has a huge footprint in e-commerce, logistics, cloud computing, consumer media, and much more. Why not add vaccine development to the list? Insider reported Monday that the Seattle-based conglomerate is partnering with a health care neighbor, the Fred Hutchinson Cancer Center, on a clinical trial involving personalized breast and skin cancer vaccines. Amazon officials confirmed the company is “contributing scientific and machine learning expertise” to the project, which is proceeding to a Phase 1 trial with the U.S. Food and Drug Administration’s approval. 

From the article:

The cancer vaccine project is the latest indication of Amazon's growing interest in the healthcare sector. The giant online retailer has launched an online pharmacy service, a new primary care business, and an in-house diagnostics lab, as well as a health-tracking device called Halo in recent years. This is the first known case of Amazon testing its own drug of any kind.

During last year's internal all-hands meeting, Amazon's CEO Andy Jassy called the company a "significant disruptor" in the medical-care field, calling out its Amazon Care primary care business as one of the company's top priorities, as Insider previously reported.


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