Weekly Brief: Amazon Eyes Bigger Profits with its BEV Delivery Fleet

Amazon deployed its new fleet of electric delivery vans to cities across the US.

The vans are manufactured by Rivian, which Amazon supported with a $1.3Bn investment in 2019 and which has built the customized delivery vans from the ground up at its EV factory in Illinois. The rollout began last week in Baltimore, Chicago, Dallas, Kansas City, Nashville, Phoenix, San Diego, Seattle and St. Louis, among other cities. Amazon has outfitted its delivery depots with charging stations to support the growing fleet. The online retailer expects to deploy thousands of electric delivery vans in more than 100 cities by the end of the year and 100,000 across the US by 2030.

Amazon was the first signatory of The Climate Pledge, a commitment to pursue ambitious carbon-reduction activities across its business operations and supply chains. More than 300 businesses are now signatories. Amazon’s specific pledge is to reach net-zero carbon across its operations by 2040. Rolling out a nationwide electric delivery fleet is a big part of achieving that goal. Profitability is another motivating factor here. Amazon is eager to eliminate one of its biggest expenses, paying third-party companies like FedEx, UPS, and the US Postal Service to deliver its packages to customers around the country. Once it has its electric delivery service up and running, look for CEO Jeff Bezos to aim his corporate bazooka at the next biggest delivery expense on his ledger: delivery drivers.

Back in 2020 Amazon purchased self-driving-car start-up Zoox for more than $1.2Bn. Last week Zoox announced that it is ready to start testing its robo-taxis on public roads in California. Its self-driving pods are manufactured at Zoox’s factory in Fremont, California, near Tesla’s home base. Dubbed the VH6, they seat four passengers with no steering wheel or driver pedals on board. Nothing about their design is suited to delivering boxes to Amazon Prime customers and Amazon has made it clear that Zoox’s focus is on the $5Trn transportation sector, not robotic delivery and logistics. However, you can bet that it’s working hard behind the scenes to bring autonomous technology into its Rivian fleet on the same 2030 timeline.

In other news last week, Herbert Diess’s four-year run as the CEO of Volkswagen has come to an abrupt end. Diess took over in the wake of the Dieselgate scandal and helped push VW in a new direction toward electrification and software enablement. The speed with which he expected change, however, frustrated some on the board and angered labor unions, especially when Diess unabashedly claimed that going electric would shave jobs across the industry. Oliver Blume, current CEO at Porsche, will assume Diess’s role. Scott Keogh, current CEO of Volkswagen of America, will head over to the top spot at Scout, VW’s new EV brand.

Finally, Chinese search giant Baidu unveiled a new low-cost, all-electric robo-taxi that it plans to deploy across China. The vehicle is Baidu’s sixth generation autonomous vehicle and by far its most affordable. The company says that it can manufacture each unit for $37,000, autonomous technology included, which will enable Baidu to deploy at scale and speed on its Apollo Go ride-hailing network. Paul Myles has the details.

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