Check out Walmart's new fleet of electric delivery vans

• Walmart bought a new fleet of all-electric vehicles from startup Canoo.
• Walmart employees will drive the vehicles to fulfill online orders.

In a bid to shore up its online delivery capabilities, Walmart has bought a fleet of 4,500 electric delivery vehicles from electric vehicle startup Canoo. The retail giant has an option to buy as many as 10,000 of the pill-shaped vans.

Walmart employees and Walmart GoLocal operators will use the vehicles to deliver online orders. Canoo will begin producing these "Lifestyle Delivery Vehicles" in the fourth quarter of 2022. In a blog post, Walmart said shoppers can expect to start seeing the vehicles out and about in 2023, but first Walmart's team must "refine and finalize vehicle configuration in the Dallas-Fort Worth metroplex in the coming weeks."

The retailer described the van as "optimized for sustainable last mile delivery use cases" and "engineered for high frequency stop-and-go deliveries and speedy vehicle to door drop-off, including grocery and food/meal delivery." The van has a panoramic window to help improve visibility. It also has 120 cubic feet of cargo space, with an interior custom-designed for small-package delivery, Canoo said in a statement.

Walmart has previously reached deals to use electric delivery vehicles from GM's BrightDrop and Ford.

The latest news from Walmart could be viewed as a response to Amazon's 2020 unveiling of electric delivery vehicles. The two retail giants have long been in heated competition, with Amazon dethroning Walmart as the biggest retailer in the United States for the first time in 2021. In light of that growing rivalry, Walmart has begun using 3,800 stores as online fulfillment centers. As competition with its online rival Amazon continues to heat up, the brick-and-mortar company touts its ability to "reach 80% of the U.S. population with same-day delivery on a growing assortment of items."

"Today, the closest Walmart to customers is right in their pockets — it's the Walmart app," David Guggina, senior vice president of innovation and automation for Walmart US, said in a statement. "By continuing to expand our last mile delivery fleet in a sustainable way, we're able to provide customers and Walmart+ members with even more access to same-day deliveries while keeping costs low."

Like Walmart, Canoo is headquartered in Bentonville, Arkansas. The electric vehicle company was founded in 2017 under the name Evelozcity. The move from Walmart may prove to be a turning point for Canoo, which has been running low on cash. In May of 2022, The Verge reported that the company was cash-strapped to the point of announcing that it could likely only afford to operate for another quarter.

"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," Canoo CEO Tony Aquila said in a statement.