Electric vehicle startup, Canoo Inc. GOEV, recently signed a definitive agreement with Walmart Inc. WMT. According to the deal, WMT will buy at least 4,500 of Canoo’s upcoming electric delivery vans, beginning with the Lifestyle Delivery Vehicle (LDV), and will have the option to purchase up to 10,000 units.
Post the announcement, shares of Canoo gained more than 50%.
The vehicles will enable sustainable delivery of online orders and contribute to Walmart’s goal of net-zero emissions by 2040. The LDV is expected to be launched in 2023, but the companies intend to start advanced deliveries to refine and finalize vehicle configuration in the Dallas Fort Worth metroplex in the coming weeks.
Canoo’s vehicleswill be driven by Walmart associates to deliver online orders, from groceries to general merchandise. It will also be used for Walmart GoLocal, the retailer’s delivery-as-a-service business. The vans will be built at its Oklahoma unit and are expected to begin service next year.
This deal marks the third major deal signed by Walmart for electric vans, the others being with General Motors and Ford.
Earlier this year, Walmart signed a deal with GM to reserve 5,000 vans from its subsidiary BrightDrop. In another agreement, it purchased 1,100 electric vans from Ford E-Transit, some of which are already in operation by Walmart.
Canoo has been actively establishing an EV ecosystem in the country to create a number of technology and manufacturing jobs in the surrounding communities. Canoo’s fully electric LDV is an American-made commercial EV optimized for sustainable last-mile delivery use cases. It expects to start production of the LDVs in foruth-quarter 2022.
GOEV is enthusiastic about the deal and looks forward to adding to the logistics capabilities of the LDV. Walmart’s massive store footprint provides a strategic advantage in the deal.
Zacks Rank & Key Picks
GOEV carries a Zacks Rank #3 (Hold), currently.
Better-ranked players in the auto space include BorgWarner BWA and Standard Motor Products SMP, each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BorgWarner has an expected earnings growth rate of 23% for 2023. The Zacks Consensus Estimate for current-year earnings has been constant in the past 30 days.
BorgWarner’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. BWA pulled off a trailing four-quarter earnings surprise of 33.1%, on average. The stock has declined 27.4% over the past year.
Standard Motor has an expected earnings growth rate of 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.
Standard Motor’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 40.34%, on average. The stock has risen 3.4% over the past year.
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