Canoo has outsourced the production of its electric vans which it has been developing for Walmart. It announced this in its Q2 financial results filing. Its CEO Tony Aquila announced that it didn’t have the immediate capability to manufacture the vans itself so in the meanwhile an unspecific contractor till the end of the year. Originally, it said it will be shifting production facility in Bentonville where Walmart is also situated. Canoo has an order of 4,500 electric vans from the retail giant.
Walmart also has an option of ordering up to 10,000 cars. Canoo already had a contract manufacturing deal with Dutch company VDL Nedcar but it backed out of the deal in late 2021 as it believed it could start production of the LifeStyle car.
Aquila says that deliveries to Walmart are on track to begin in the first quarter of 2023. Canoo’s success is predicated on the completion of this agreement.
“We have entered into an agreement with Walmart Inc. for the purchase of electric vehicles and expect that, at least initially, Walmart Inc. will be our largest customer. If we are unable to maintain this relationship, or if Walmart purchases significantly fewer vehicles than we currently anticipate or none at all, our business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected,” said Tony Aquila.
Canoo is burning through its cash reserves quite rapidly. It has posted a net loss of $164.4 million for this quarter. It posted $289.8 million in the first half of the year.
