is providing a lifeline to electric vehicle start-up
The retail giant is buying 4,500 electric delivery vans with the option to purchase up to 10,000 units. The electric vehicles will support
(ticker: WMT) last-mile delivery operations and are slated to hit roads in 2023.
In early trading,
stock (GOEV) was up 108% to $4.92 a share. The
Dow Jones Industrial Average
were up 0.5% and 0.4%, respectively.
“We are proud to have been selected by Walmart,” Canoo CEO Tony Aquila said in the company’s news release. “Our [Lifestyle Delivery Vehicle] 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.”
Coming into Tuesday trading, Canoo stock was down 69% this year and down about 90% from its all-time high of almost $25 a share. Inflation, rising interest rates, and recession fears have sapped investor enthusiasm for more speculative ideas. Canoo doesn’t generate sales yet.
In May it signaled that it might not be able to keep operating unless it can raise more cash. Canoo used language like “going concern,” which spooked investors.
Going-concern language “is warranted when there is substantial doubt the company can continue to conduct its normal business operations in the foreseeable future without having to liquidate a portion of its assets and/or restructure its obligations,” accounting expert Robert Willens told Barron’s at the time.
The deal doesn’t appear to include upfront cash for Canoo. The company didn’t immediately respond to a request for comment about any additional capital from Walmart.
Canoo ended the first quarter with roughly $100 million on its balance sheet. Cash burn has average roughly $150 million a quarter for the past few quarters.
In May, the company entered into an agreement with Yorkville Advisors to buy up to $250 million in Canoo stock.
Write to Al Root at [email protected]