Canoo’s electric vehicle purchase pact with Walmart announced Tuesday contains a condition not to supply any vehicles to competitor Amazon during the duration of the agreement.
The provision was disclosed in a filing with the U.S. Securities and Exchange Commission (SEC).
In addition to the Amazon provision, the manufacturer of electric vehicles must let Walmart know in writing of any any acquisition offers within 72 hours, according to the SEC filing.
Retail giant Walmart signed an agreement with Canoo to purchase 4,500 delivery vans to support Walmart’s e-commerce business. The pact contains an option for Walmart to buy an additional 5,500 vehicles.
Canoo also disclosed to the SEC that it issued Walmart a warrant to purchase up to an aggregate of 61,160,011 shares at an exercise price of $2.15 per share. The warrant has a term of 10 years.
The vehicles supplied to Walmart will be used to deliver online orders in a sustainable way that will also contribute to Walmart’s goal of achieving zero greenhouse gas emissions by 2040.
While Canoo’s “lifestyle delivery vehicle” is expected to begin hitting the road in 2023, the companies plan to kick off advanced deliveries to refine and finalize vehicle configuration in the Dallas-Fort Worth area in the coming weeks.
Canoo said it anticipates starting production of the LDVs in the fourth quarter of 2022.
The company said a year ago that it intended to provide at least 1,500 jobs by building a factory with 3-million-plus square feet of space at MidAmerica Industrial Park in Pryor. Canoo CEO Tony Aquila said earlier this year that a plant capable of producing 300,000 vehicles annually could be operational at MAIP by 2024.
Amazon is expected to surpass Walmart as the top retailer in the United States by 2024, according to report from Edge by Ascential, a London-based analytics company.
Research firm Statista found that the e-commerce percentage of national sales jumped from 5.8% in 2013 to 16.1% today, a number expected to climb to 21.9% by 2025.
By 2026, Edge by Ascential forecasts that the top three retailers in the country will be Amazon, Walmart and Costco, with retailer market shares of 14.9%, 12.7% and 4.4%, respectively.