Walmart doesn’t want Canoo to sell Amazon EVs

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Walmart signs deal with electric car maker Canoo on Tuesday to purchase 4,500 last mile delivery vehicles. While the deal isn’t exclusive, it does prevent Canoo from selling to Walmart’s rival Amazon.

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Walmart’s agreement to buy up to 10,000 electric vans from start-up turned SPAC Canoo includes a clause blocking Amazon sales, according to regulations. first reported by Bloomberg. Kanu warned last quarter that may not have enough money to stay in businessso it’s no surprise that the company made a deal with Walmart despite the restrictions.

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Canoo’s shares rose more than 50% when the deal became known, but has since fallen 1.65% after the close on Wednesday. The company’s shares have fallen almost 56% since the beginning of the year.

Either way, Amazon may not be interested in Canoo. The online trading giant ordered 100,000 vehicles from Rivian. in which he also owns 20% of the shares. While it’s unclear how many EVs Rivian has already delivered to Amazon, the company says it’s on track to achieve its goal of producing 25,000 electric vehicles this year. However, this is about 15,000 short of Rivian’s original production target. lowered the production plan in March after disappointing Q4 2021 earnings.

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Amazon also signed on to play first commercial customer for the Ram ProMaster electric vanwhich Stellantis plans to launch in 2023.

In terms of net income, Walmart is still a good bet for Canoo. The company’s total first-quarter sales exceeded $141 billion, compared to $81 billion in Amazon retail sales. And under the terms of the deal, Walmart could eventually own more than 20% of Canoo based on an order issued to the retailer to buy up to 61.2 million shares at a strike price of $2.15 per share. The warrant has a term of 10 years and is granted immediately for 15.3 million shares of common stock, according to the announcement.

The remainder of the shares will be vested quarterly and pro rata to any income generated by Canoo from operations with Walmart or its affiliates, or any products or services offered by Walmart Canoo, until the net income is $300 million, at which time the warrant will be issued. fully endowed.

Canoo’s docs also indicate that the Walmart buy order is non-binding, but that seems to be the standard for risky EV SPAC deals – Amazon’s deal with Rivian is also non-binding and subject to change.

Walmart has also reserved 5,000 e-delivery vans from BrightDrop.General Motors’ commercial electric vehicle division, as part of its larger goal of building a zero-emissions logistics fleet by 2040.


Credit: techcrunch.com /

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