Walmart has agreed to buy 4,500 of its upcoming electric delivery vans from Canoo, an electric vehicle startup – a huge victory for the automaker.

The retail giant has struck a “definitive agreement” to buy at least 4,500, and maybe up to 10,000, of its all-electric Lifestyle Delivery Vehicles, which are small electric vans designed for local delivery service.

The move is part of Walmart’s drive to compete with Amazon’s speed in providing online deliveries.

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It has launched and extended e-commerce services such as InHome, which delivers groceries directly to customers’ refrigerators, and Express Delivery, which delivers orders to customers’ doors within two hours.

Unlimited home grocery delivery is also a benefit of Walmart+, a yearly membership plan that the big-box retailer hopes to expand.

However, more delivery vehicles are required to expand those services. InHome’s fleet is all-electric.

Canoo is Walmart’s third significant contract for electric vehicles.

Walmart reserved 5,000 electric vehicles from General Motors subsidiary BrightDrop earlier this year.

It has purchased 1,100 electric vehicles from Ford E-Transit, some of which are currently in service.

For InHome and other local deliveries, the big-box retailer intends to deploy electric trucks from all three firms.

It plans to expand the access of InHome from 6 million to 30 million homes by the end of this year, including key metropolitan areas such as Los Angeles and Chicago.

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The decision also comes at a time when gasoline prices are putting a strain on Walmart’s profits and making deliveries online more expensive.

In a message last week, the business stated that it will charge some suppliers extra costs to deliver items to its warehouses and stores.

Canoo’s vans will be manufactured in Oklahoma and will enter operation early next year. The deal’s details were not disclosed.

The firm is one of the numerous electric vehicle startups in the US that have gone public through mergers with special purpose acquisition companies, or SPACs.

Last quarter, the company warned that it might not be able to stay in business.

However, its shares gained more than 50 percent following the news.

Source: CNBC

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