Eye on Retail: Walmart goes heavy on electric vans

Walmart has made another move to help reach its goal to of zero emissions by 2040.

The retail giant has signed an agreement with electric vehicle maker Canoo to purchase 4,500 of the company’s all-electric “Lifestyle Delivery Vehicle,” with the option to purchase up to 10,000 of the small vans. Terms of the deal were not disclosed.

Walmart employees will use the Canoo vehicles to deliver online orders, from groceries to general merchandise, starting in 2023. The two companies plan to “kick-off deliveries to refine and finalize vehicle configuration” in the Dallas Fort Worth metroplex in the coming weeks.

“We’re thrilled to continue diversifying our last-mile delivery fleet with Canoo’s unique and sustainably focused all-electric technology which will provide our associates with safe, ergonomic delivery vehicles,” said David Guggina, senior VP of innovation and automation, Walmart U.S. “By continuing to expand our last-mile delivery fleet in a sustainable way, we’re able to provide customers and Walmart+ members with even more access to same-day deliveries while keeping costs low.”

Last year, Canoo announced it had selected Bentonville, Ark., hometown of Walmart, as its headquarters.

“We're encouraged that by being located in close proximity to the Canoo headquarters, we have the advantage to collaborate and innovate in real-time as well as the opportunity to aid in the creation of manufacturing and technology jobs here in our home state of Arkansas," added Guggina.

According to Canoo, the LDV is designed for high-frequency, stop-and-go deliveries, including grocery and food/meal items. It boasts a customized interior with 120 cubic feet cargo volume. The vans will be built at Canoo’s factory in Oklahoma.

“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,” said Tony Aquila, investor, chairman and CEO of Canoo.

The deal with Canoo comes as Walmart continues to expand its last-mile delivery services, including InHome, which delivers groceries directly inside customers’ homes.  Last week, Walmart said it was offering InHome as optional add-on within its paid membership progam, Walmart+.

The Canoo deal is Walmart’s third electric vehicle deal. In January, the retailer entered into an agreement to reserve 5,000 all-electric delivery vans from General Motors’ BrightDrop subsidiary. It also purchased 1,100 electric vans fromFord E-Transit.

In addition to dedicated fulfillment centers, Walmart uses 3,800 of its stores, which are located within 10 miles of 90% of the U.S. population, to fulfill online orders.

(This article originally appeared on HBSDealer's sister site Chainstoreagecom.)