Walmart taps electric vehicle maker for 4,500 e-commerce delivery vans

E-commerce shoppers in the Dallas region could start receiving their parcels in coming weeks from a new type of delivery van, after Walmart today said it has agreed to purchase 4,500 all-electric delivery vehicles from automaker Canoo. 

Bentonville, Arkansas-based Walmart also secured the right to buy as many as 10,000 of the Lifestyle Delivery Vehicle (LDV) model, saying the vans will be used to deliver online orders in a sustainable way and contribute to Walmart's goal to achieve zero-emissions operations by 2040.

Walmart plans to start running its LDV fleet widely in 2023, but will begin a Texas pilot within weeks to refine and finalize vehicle configuration in the Dallas Fort Worth area.

The announcement is the latest adoption of electric vehicles for last-mile parcel delivery, following FedEx Corp.’s June announcement that it had taken possession of its first 150 battery-powered vans from General Motors’ BrightDrop unit.

It also follows the U.S. Postal Service (USPS)’s move to replace its aging fleet of delivery vehicles primarily with gas-fueled instead of electric trucks. In 2021, USPS named military contractor Oshkosh Defense for a $482 million contract in the most sweeping modernization of its fleet in three decades, ordering between 50,000 and 165,000 vehicles over the next decade. After seeing swift criticism for specifying just 5,000 of those vehicles as electric, USPS increased the battery-powered order to 10,019 units in 2022.

Walmart said the Canoo LDVs will join its online order fulfillment network, which operates out of dedicated fulfillment centers as well as 3,800 Walmart retail stores, which are located within 10 miles of 90% of the U.S. population. That network relies on a combination of Walmart associates, independent contractors driving on the Spark Driver Network, third-party delivery service providers, and in some locations, autonomous vehicles and drones. All in, Walmart says it can reach 80% of the U.S. population with same-day delivery.

Canoo says its LDV will help drive that system because it is optimized for sustainable, last mile delivery use cases. The model uses steer-by-wire technology to reduce moving parts and cabin intrusion, resulting in more usable interior space, better driver ergonomics, and the addition of a panoramic window to improve road visibility. The LDV is engineered for high frequency, stop-and-go deliveries including grocery and food/meal delivery. Its customized interior is designed for small package delivery, with a 120 cubic feet cargo volume.

“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. This is the winning algorithm to seriously compete in the last mile delivery race, globally," Tony Aquila, Canoo’s chairman and CEO, said in a release. "Walmart's massive store footprint provides a strategic advantage in today's growing 'Need it now' mindset and an unmatched opportunity for growing EV demand, especially at today's gas prices."

In a sign of the tight bond between the two companies, Canoo recently announced it had selected Bentonville, Arkansas, as its headquarters and nearby Pryor, Oklahoma, as the site for its U.S. manufacturing.

Editor's note: This article was revised on July 12 to add details about USPS' use of electric vans.

New car smell x 4,500. We’ve collaborated with tech mobility company @Canoo to purchase 4,500 all-electric vehicles for our last mile delivery fleet. The goal: deliver orders in a sustainable way and work toward achieving zero-emissions by 2040. Read more: https://t.co/Or7cAlreu3 pic.twitter.com/hvWSvbhSa0

— Walmart Inc. (@WalmartInc) July 12, 2022

@Walmart to Purchase 4,500 #Canoo Electric Delivery Vehicles to be Used for Last Mile Deliveries in Support of Its Growing eCommerce Business
Learn more: https://t.co/1zwcGtNNSd pic.twitter.com/sA4lczI9SM

— Canoo (@canoo) July 12, 2022