TLDR: Is a literary device recently inserted into the Author/Reader relationship, to cater to the demands of an instant gratification culture.
Luckily, or unluckily for you, depending on who you are, I come from an era that recognizes the value of risking the time to try and comprehend the fullness of another's point of view, whether I inevitably agree, or disagree with it in the end... ESPECIALLY when they've taken the time to attempt to properly articulate their point of view.
That said, to do it right, indeed requires reading it all until the very end, even if that means skimming. That said... I'll extend an olive branch; This is a long read. About 25 minutes in fact, depending on how quickly you can pick up what this particular author is laying down, and how much time you spend on the provided links and graphics.
INTRO
A lot has been going on lately with Canoo: Production dates advanced, Nedcar dropped, HQ moved to Arkansas... Staying true to form, the Canoo leadership has given retail investors ZERO reasons why, what the justifications are, expenses, locations, plans moving forward, build out timelines, etc.. Not one peep, because apparently, we're expected to just trust them, which wouldn't be so bad if there was an established history, but clearly there isn't.
Justifiably, I personally have this growing image of a tattooed high school dropout in a big leather office chair, leaned back, hands behind his head, feet kicked up on a desk, and a lit cigar in his mouth, arrogantly, smugly, and condescendingly saying to me,
"Trust me kid, I got this."
But that's NOT what I'm ultimately here to talk about today. Being us investors have been abnormally left out of the loop here since day one, regarding what's being done to protect and grow our investment, we've been forced to speculate on what little we know about the moves Canoo/Tony Aquila claims to be making.
For those of you not familiar with my famous past Canoo speculative articles:
Canoo+Apple is Apparently Being Revisited
https://www.reddit.com/r/goev/comments/p6z1iv/canooapple\_is\_apparently\_being\_revisited/
Canoo: The Graphic Possibilities (Round 1)
https://www.reddit.com/r/goev/comments/p0w0zz/canoo\_the\_graphic\_possibilities\_round\_1/
And just like those articles, I'm here once again today in MY true form to talk about...
WALMART
I'll briefly say that Walmart has been a benchmark in my portfolio since the late 80's. I'm very pleased with where its at today, but I honestly feel like their next leg up is right around the corner.
In case you haven't noticed, Walmart is aggressively pursuing the tech industry. Crypto's, NFT's, EV's, AI, Web 3.0, etc..
Walmart's Headquarters are located in the North West Corner of Arkansas, in the City of Bentonville, which boarders Missouri to its north, Oklahoma to its west, and respectively, just to the north west is Kansas.
Northwest Arkansas (NWA) was considered the quintessential "Podunk Nowhere USA" until the 90's when Walmart actively started to build up the Area into one of America's MOST BEAUTIFUL cities. Now today, NWA and its 3 corners is one of the fastest growing areas in country. One of the fastest growing Tech Centers too. Realtors and Development Companies are LITERALLY incentivising tech engineers, and tech startups to the area with $10K+ in Bitcoin. Here's an example:
https://www.youtube.com/watch?v=VRLZZJrNSRo
What many may not know about Walmart, is Sam Walton, it's founder, was also one of the founders of the Go Green and Renewable Energy movements in the 60's and 70's. His whole philosophy surrounding his business model was to reduce energy consumption, reduct waste, and reduce pollution. By doing so, he could pass the savings on to you the consumer, as well as become a better steward of the environment. That philosophy to this day is the main foundation of Walmart's business model.
With all of this in mind, it's kind of a no-brainer to speculate that Walmart would support, and want to actively be a part of the EV revolution. Moreover, they would want to use such an opportunity to better compete with their online nemesis Amazon.
About the Competition Between Amazon and Walmart
Since the advent of Amazon becoming the #1 online store in the country, they had never really been viewed as a DIRECT competitor to such companies as Walmart, Target, and Kohl's. The general view was that Amazon was the online "option" to those brick and mortars, vs. a direct competitor.
As those brick and mortar companies started to improve their online shopping experiences over the years, and as Amazon started putting up warehouses all over the country, its been GAME ON behind the scenes! Then in 2016, this happened:
https://www.thv11.com/article/money/business/list-walmart-stores-closing-in-arkansas/91-43641737
Closing 269 Walmart Stores, causing 16,000 jobs worldwide, with 10,000 of those jobs in the US to be lost, specifically due to competition with Amazon, is a VERY big deal. Moreover, it was the first widely publicized blow delivered behind the scenes by Amazon, and it wasn't like Walmart is just going to stand there and take it.
Comparatively, closing 269 stores of the 11,000+ isn't a lot, and just amounts to a redirect of funds into other needed projects, like ACTIVELY going after Amazon for giving them a balance sheet black eye, forcing Walmart's hand to publicly swing back.
Step 1: Walmart Delivery
Just before COVID in September of 2019, Walmart announced its plans to start a nation wide grocery delivery service using an online membership model similar to Amazon Prime. Walmart is no rookie when it comes to membership models thanks to it's it subsidiary Sam's Club.
The plan was to bring the beta tested delivery services to 200 markets/1600 stores across the US starting in late fall of 2019.
Then BOOM! COVID hits in full enforcement globally only 6 month later. Talk about timing! Now suddenly Walmart is forced to build some form of a delivery and pickup service infrastructure in EVERY one of its 11k+ stores WORLDWIDE. Not only that, but what a gift of a sudden MASSIVE organic EXPLOSION of people key wording, "Walmart delivery" yeah?
Time to really speed up the process yeah? Which brings us to the other reason I'm here today...
CANOO
My latest "YEP!" company.
For more on what exactly that means, I'll point you to my Apple+Canoo article I listed above. For another point of reference, Apple was my first "YEP!" in 1987, Walmart was my second in 1989, with several others in between my latest, which was Shopify, until Canoo came along.
Yes... I come from an era where my StockTwits and Reddit were once those weird pages with all the numbers on them, found in the business section of the Pioneer Press, and placing a buy or sell order meant picking up a touchtone wall phone and calling my broker.
I spotted Canoo during it's HCAC days. With them, I saw a VERY clear vision of the future, with the 2 main innovations being the MPP (Multi Purpose Platform - FKA the B2B Skateboard), working in conjunction with the SbW (Steer by Wire) technology, and the second innovation being the Micro Factory.
Here's the graphic of my vision of the future I created back in January of 21', and was posting on StockTwits:
Of course the players and the numbers in this graphic were all speculative because we knew nothing, and could only logically speculate. We still really don't know (have verified) much, but the general structure here I stand by as being ideal, for the reasons I've outlined.
We now know that on the far left, VDL Nedcar occupied that spot, which of course is now going to be replaced by the Oklahoma plant, something I also talked about from the beginning. I contended that a TEMPORARY Contract Manufacturer (CM) would ONLY fill the manufacturing void until Canoo got their own factory up and running. Which of course was the basis for my argument also found in the Canoo+Apple article, which was that Canoo needed a Blue Whale to bring to the table to land that needed SHORT TERM CM.
In the center of the graphic, the only one we can officially put there ATM, is FrontDoor Collective with their publicly announced 10k MPDV order, and whatever of the 10k non-committal LV preorders that may end up ultimately committing.
The VDL Nedcar announcement WAS NOT ideal for my graphic or vision, but it was more than plenty for Canoo to get my official "YEP!", which they pretty much had anyways, I just needed a committed verification to be publicly announced.
What ideally did fit my model was all the talk about creating US jobs at the time, but it was acceptable that it appeared Canoo was going to breech the European Market sooner than later. Side Note: Later seems to still be VERY MUCH on the table, and not that much later at that. They've openly stated they're STILL involved with VDL Group, with Nedcar only being the manufacturing branch of that group. At the very least, it's likely VDL Group is supplying all the manufacturing equipment via another one of their branches, VDL Systems.
The "Mega-Micro" Factor
Soon after Tony Aquila took over, and the guidance mashup was announced, Tony coined the phrase "The Mega-Micro Factory". For the most part, Tony and I seem to have the same vision. Forcing a subscription model was a bad idea. Making it optional was a good idea. Deemphasizing the B2B (MPP) as a separate product to protect their IP was a good idea. NOT taking it completely off the table as a separate product, and changing it's name to MPP was also a good idea. Fact is, there's a Blue Whale out there that could REALY use the MPP (B2B) EXCLUSIVELY, and of course is the foundation (pun intended) for my Canoo+Apple speculations.
The micro-factory, and my vision of how it fits into this company and its products moving forward, is a BRILLIANT idea too. That said, it was never taken off the table. It was only overshadowed by the name "Mega-Micro Factory", which presumably is the Oklahoma factory. Now I could get into speculating about all the clandestine, behind the scenes, even "on the scene" secret deflection moves that business have to make sometimes to protect their IP, but I'm not going to. It's TOO MUCH speculation and explanation that's irrelevant at this point. The fact is, the micro-factory model HAS TO BE BACK IN FULL FORCE.
There is NO WAY they're able to move up their production timeline, while dually dumping their contract manufacturer, without some kind of factory ALREADY in place. Moreover, it would HAVE TO BE THROUGH...
The Micro-Factory
For those who may not know, or cannot put it together from my past articles and graphics above, what a micro-factory is, or how it may function:
Unlike the normal model for an automotive manufacturing plant, like Teslas GIGA Factories, that have 5 MILLION square feet, a Micro-Factory/Dealership only requires 200K-500k square feet. Moreover, those buildings already exist, and are sitting empty across the country, even the world.
To start up a factory, all one needs to do is find your best location, sign a lease, and spend less than 18 months doing a built out of an existing structure. VIOLA! Insta-Auto Manufacturing Plant.
Even a piece of land needing a structure tear out, it would take less than 2 years (Under promise and over deliver) to build out a new plant. Of course it would also be for a FRACTION of the cost and time it would take to build out a standard two million to five million square foot factory. Just think of all the time and money they DON'T have to spend on land surveys, water shed surveys, soil surveys, city approvals, etc. that sometimes take YEARS to find an approved location, even before building begins. An existing property ALREADY has all of that done, and a building ALREADY exists, be it a build out, or a tear out.
The thing that empowers Canoo to utilize with precision the micro-factory concept, is the MPP with it's SbW technology. The MPP is 70% of a COMPLETE EV. The Micro-Factory/Dealership ONLY needs to manufacturer/Assemble the other 30% (See above graphics top key points for more details). The other 30%, known as the "Top Hat", can be custom "Made to Order" right at the Micro-Factory/Dealership. Paint (Custom Skin), seating and steering configurations, door configurations, component configurations, etc..
Say goodbye to the days of companies having to guess at which models, colors, and option combinations do better in which markets. Only to have a (technically 3rd party) dealership try to pedal a "quick sale" of what they've been supplied to their lot, to whomever walks through the door that day.
Now say hello to the days of the consumer custom building to suit their needs right at the dealership... DEALING DIRECTLY with the manufacturer! To better help you with the vision, the Micro-Factory/Dealership is basically a Lego assembly plant, with the Legos themselves manufactured elsewhere, AKA The Mega-Micro Factory:
The Vision is Somewhat Blurred Now
In my vision, a CM is a critical piece to ramp up production over the next few years. Moreover, what I don't see happening is being able to install the sizable sheetmetal fabrication shop and materials warehouse required to fabricate the MPP and other body components, as well as a fabricated component assembly line being packed into even a 500k Sq Ft Micro-Factory, let alone trying to accomplish it all in a 275k Sq Ft Micro-Factory.
Can it be done in some combination of two or three facilities, or one 700k+ facility? Is there a secret CM somewhere in the wings producing, or has already produced MPP's? Sure... maybe... probably... but recently we've seen some low level execs posting pics, and giving away locations of an empty 275k Sq Ft warehouse. For all we know, the pics are over a year old, and/or there are 3 others in the area their not leaking about.
IDK... what I do know is once again, I guess we're not privy to knowing any specifics about how our money is being used, and only get these vague peelings we're forced to fight over like a pack of hungry monkeys fighting over a banana peel.
But I digress, because like I said, I'm not here to get into all of that, and have written what I have to get why I'm ultimately here today, and that is...
CANOO+WALMART
Before I get too into it, I need to emphasize that THINGS TAKE TIME!
Just look at Walmart's store closing announcement in 2016. They probably spent 2016 enacting the store closure plan, and designing a delivery service plan. Spent 2017 beta testing the delivery service in key locations. 2018 ramping to a gamma soft launch, until finally announcing a nationwide full service launch at the end of 2019. Three and a half solid years to launch a simple nationwide delivery service by a highly experienced, well established company. Moreover, they've also probably been talking to the likes of GM and Ford about EV's since 2016, before Canoo even existed.
So... About All That
At the beginning of January this year, Walmart was a Keynote at the 2022 Consumer Electronics Show (CES), likely announcing some new partnerships, particularly an EV partnership. Given the turn of events with Canoo announcing only a month and a half prior, that they're moving their HEADQUARTERS to Bentonville Arkansas, anticipation was high that Canoo was going to be announced as their partner. After all, they just rented a bedroom in Sam Walton's house.
What people weren't considering, is the likes of Ford, International, GM, Peterbilt etc. have probably been renting sheds in his back yard since the 70's. In 2003, Walmart displaced GM on the fortune 500 list, accounting for 2.5% of our nations GNP. The likelihood the two have at least have had conversations since then is VERY high.
Sure enough, the announcement at the CES came: Walmart will begin taking delivery later in the year, through 2023, of 5000 eDV's from BrightDrop, the new eDV branch of GM (Government Motors),
...and sure enough, bears immediately went to work bullying people with lies, misdirections, and falsehoods about what's really going on,
...and sure enough, uneducated people bought into it,
...and sure enough, those people lost money as the stock price fell to ATL's,
...and sure enough, many of them will be back as the bear who points the finger and blames everyone else for their folly, imprisoning themselves behind the bars of constantly suffering the consequences of chasing instant gratification (See TLDR).
For those that seek to educate themselves, who this article was SPECIFICALLY written for, time to reveal...
WHAT'S REALLY GOING ON
- Walmart has 11,000+ stores worldwide that have an IMMEDIATE need for eDV's thanks to COVID. 5k eDV's are not only NOT going to cut it, but you don't put Grandmas groceries in an that kind of eDV. The Canoo LV was SPECIFICALLY designed for the task (and better suited). Ergo, Walmart is going to need a VERY diverse EV fleet that GM will NOT be able to fulfill in whole.
- NO company puts all of their eggs in one basket. Just look at their Semi fleet of Peterbilt, International, and Freightliner.
- Though 2016 is a benchmark date being used for Walmart in this article, here's a video from 2014 that shows HOW SERIOUS Walmart has been about being part of the EV revolution, 100% inspired by those foundations Sam Walton built, which are also mentioned in this article. https://www.youtube.com/watch?v=NER9X4_gtYk
- Tony/Canoo has likely been talking to Walmart since AT LEAST early 2020 thanks to COVID and their obvious sudden need, likelier since 2019 when the nationwide delivery program was announced, and even LIKELIER Walmart is making concessions to advance Canoo's progress due to their sudden increased need thanks to COVID.
- Development companies like CrossMar, don't pull millions of dollars in permits, and build millions more in buildings unless they have commitments to fill those buildings. https://talkbusiness.net/2018/11/real-deals-crossmar-industrial-park-growing-with-15-4-million-permit/
- City Planning Committees don't grant permits to development companies unless they show a very high committed occupancy, from city approved occupants. It's a long process really. Ergo they don't want a bunch of empty buildings polluting their towns attracting squatters and strip club tenants.
- The City Planning Committee of Bentonville does not approve ANYTHING unless Walmart approves.
- Why would the City of Bentonville, and by default Walmart, the company with an immediate need for 100k+ eDV's approve this?
- Is it possible those BRAND NEW Walmart "Distribution Centers" sandwiching Canoo's new HQ are betas for their upcoming Auto Parts and Service expansion?
- Is it possible those BRAND NEW Walmart "Distribution Centers" sandwiching Canoo's new HQ could hold those sheetmetal fabrication shops and raw material warehouses that Canoo is currently in need of, as well being betas for their upcoming Auto Parts and Service expansion?
- "Canoo Industrialization, Developmental, & Advanced Manufacturing Location" That becomes a WAY MORE interesting name when you realize that Walmart has a fairly consistent portfolio of 200+ empty and abandoned Walmart's, in high visibility locations across the country, allowing you to make the logical leap into the Canoo Mega-Micro Factory ---> Micro-Factory/Dealership business model.
- On the surface Canoo converting old Walmart stores into into Micro-Factory/Dealerships seems ludicrous. I was scoffed at and mocked when I first introduced the idea a few weeks ago. I can see some people who picked up on its logic have also been mocked. I GUARANTEE YOU however, Walmart will collaborate with Canoo structural developers to at least examine Walmart blueprints of many locations, to see what can be done in the best waste and pollution reduction manner. It would be hard to argue against that given what you've been shown as being the supported truth about Walmart's foundational Go Green business model in this article.
- Old Walmart's or not, the KEY ASSET here is the developed land, as mentioned in the Micro-Factory section of this article. Spend two months tearing them down, and twelve to eighteen months building that 300k Sq Ft Micro-Factory/Dealership, on the pre-developed land in a highly visible location.
IN CONCLUSION
When you look at all of the information provided here, my intent is to not only educate some of you, but to also reiterate the importance that it's ONLY BEEN A YEAR.
When you start to factor that into what's REALLY being said here, Tony looks less like that smug dropout, and more like that stern dad who has worked his tail off to make some MAJOR positive moves in a VERY short time. Now that can better translate to him actually saying:
"We're making it happen. Be patient, and you will be rewarded. Oh... and one more thing... BUY THE DIPS WILL YA? I mean duh! How much clearer do we need to spell it out??? How many more OBVIOUS MOVES DO WE NEED TO MAKE? Sheesh."
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