Walmart's Canoo Deal Blocks Startup From Selling EVs To Amazon



Walmart's Canoo Deal Blocks Startup From Selling EVs To Amazon

According to a securities filing on July 13 seen by Automotive News, Walmart's decision to buy 4,500 electric delivery vans from Canoo may prove to be essential for the EV startup's survival, but it does come with strings attached.

1. The deal includes a provision preventing Canoo from selling its electric vehicles to rival Amazon.

2. The document also indicated that Walmart's purchase order for 4,500 Canoo electric delivery vans an the option to extend it to 10,000 is non-binding. 

Actually, Walmart has very specific requirements that go beyond blocking Canoo from selling its vans to Amazon. Here's the exact language used in the 8-K form.

"Under the EV Fleet Purchase Agreement, the Company [Canoo] has agreed that, for the duration of the agreement, it will not enter into any agreement for any services involving the design, manufacture, consult, advice, lease, or sale of EVs to, or issue any equity, equity-linked or debt securities of any type, or enter into any agreement for the purpose of transferring control of the Company to, Amazon.com, Inc., its subsidiaries, or affiliates."

Canoo delivered more good news to investors that the company said it has been awarded an Army contract to supply an electric vehicle for analysis and demonstration.

Even after its strong reportings, Canoo remains a speculative investment that, if things don't go to plan, could easily run out of resources. Investors drawn to the promise and excited about these announcements should invest as part of a well-diversified portfolio.

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