Walmart has agreed to buy at least 4,500 electric delivery vans from Canoo, an electric vehicle startup.
Additionally, the retail giant may consider buying as many as 10,000 of Canoo’s all-electric Lifestyle Delivery Vehicles, which are best used for local delivery services, Canoo announced.
The company’s deal with Canoo marks Walmart’s third agreement to acquire electric vehicles. In January of this year, the company made a deal with General Motors subsidiary BrightDrop to acquire 5,000 electric vans. The company also acquired 1,100 electric vans from Ford.
Walmart’s decision to invest in electric vans is aimed at increasing InHome deliveries from 6 million to 30 million U.S. households by the end of 2022 in major cities such as Chicago and Los Angeles. The company also plans to use its electric fleet to support its Express Delivery service, which drops ordered groceries at customers’ doorsteps within two hours.
For Walmart, expanding its electric fleet also means having a better and more cost-effective way of supporting its Walmart+ subscription service, which gives users access to unlimited deliveries of grocery products. Ultimately, boosting the Walmart+ service will help the company stave off competition from rival Amazon, whose Prime membership is used by some 163 million consumers in the U.S. In comparison, Walmart+ had some 32 million subscribers as of last year.