Amazon has moved on as quickly as its same-day deliveries by announcing, almost concurrent with its breakup call to New York Gov. Andrew Cuomo, more than $1 billion of new funding for electric vehicles and self-driving cars.
On Feb. 15, a day after reporting on Amazon’s rejection of New York City as the site for H2, The New York Times focused on the positive with an article highlighting the e-tailer’s expanding portfolio of transportation investments. Amazon has recently invested $700 million in Tesla competitor Rivian and $530 million in Aurora, an autonomous driving startup.
“For Amazon, this small investment is a good way to enlarge their bet on the E.V. [electric vehicle] market without having to tool up a plant to find out if it will fly,” commented Matt DeLorenzo, an editor at Kelly Blue Book. “Over time, the Rivian investment could give Amazon a starting point to own and operate an in-house package delivery business.”
Editor’s note: Roger Barga, general manager for AWS Robotics and Autonomous Services at Amazon Web Services, will be delivering a keynote at the Robotics Summit & Expo in Boston in June. Register now to attend.
Rivian was founded by MIT engineer RJ Scaringe almost a decade ago and is one of the most exciting new developments to hit the auto industry’s fastest growing category – trucks. In the past 20 years, light trucks have skyrocketed to 68% of all vehicles sold in 2018, up from 49% eight years earlier and 32% in 1990.
In addition to running 400 miles on a single charge, Scaringe’s electric truck is priced under $100,000, with an array of built-in sensors offering Level 3 autonomy. Its founder imagines his invention being used in new creative ways beyond just hauling loads.
“Let’s say you are in a national park. We can give you a guided tour of that park, you know, narrated and explaining what you’re seeing, but it’s like the vehicles are on ‘digital rails,’ sort of Jurassic Park style, as it drives around the park,” declared Scaringe last month. “These are some of the features we’re gonna be showing over the course of next year.”
Most industry insiders echo DeLorenzo’s sentiment that Amazon’s investment is about cost savings for its shipping empire. Adam Jonas, an analyst at Morgan Stanley, stated on the day that funding was announced that “AMZN has a vested interest in managing the marginal cost of its transport and logistics expenses. Dense networks, predictable routes, and start-stop duty cycles are ideal for all-electric vehicle architectures. It’s Amazon. Do we really need to elaborate here?”
Jonas did elaborate last month when he described how the e-commerce powerhouse is building a “global, end-to-end [logistics] network covering all transportation modalities.”
In 2018, Bezos’ company spent $27 billion on worldwide shipping, in addition to extending its own fleet of planes, oceanic vessels, trucks, and unmanned rovers. During the past six months, Amazon has been moving at a more feverish pace with new industry partnerships, vehicle purchases and piloting robotic deliveries around its Seattle offices.
The mushrooming portfolio of Amazon’s holdings reached new heights this month with the company leading the Series B round for Aurora. The Silicon Valley startup was founded by a triumvirate of visionary technologists: Waymo former Chief Technology Officer Chris Urmson, Tesla former Chief Product Officer Sterling Anderson, and the founder of Uber’s Advanced Technology Center, Drew Bagnell.
Explaining the move, the $800 billion publicly traded company released a statement to CNBC, remarking “We are always looking to invest in innovative, customer-obsessed companies, and Aurora is just that. Autonomous technology has the potential to help make the jobs of our employees and partners safer and more productive, whether it’s in a fulfillment center or on the road, and we’re excited about the possibilities.”
Amazon watchers are curious if the company is starting to put together the pieces to launch its own self-driving vehicle division. In 2017, The Wall Street Journal revealed that internal teams within the retail giant have been charged with the responsibility of exploring the adoption of unmanned systems across the supply chain, from drones to forklifts to rovers to commercial vehicles.
Already, social media was abuzz last month with autonomously driven Amazon Prime 18-wheelers barreling down Interstate 10. The technology company behind the wheel, Embark, is also backed by Sequoia – the same venture capital firm that co-invested with Bezos in Aurora. Embark brags of a 100+ convoy of rigs moving goods from Phoenix to Los Angeles for such iconic brands as Electrolux and Ryder.
When asked about Amazon, its 23-year founder Alex Rodrigues curtly responded, “Embark moves freight for a number of major companies on the I-10. However, we cannot discuss any company specifically, as our relationships are confidential.”
In parallel with these endeavors, Amazon joined Toyota’s “e-Palette Alliance,” a driverless platform for multi-use mobility applications, including delivery. “This announcement marks a major step forward in our evolution towards sustainable mobility, demonstrating our continued expansion beyond traditional cars and trucks to the creation of new values including services for customers,” said Toyota President Akio Toyoda at CES. The two companies are working closely to roll out the first fleet at the Tokyo 2020 Olympic Games.
Unbeknownst to most observers is the fact that Amazon did unveil a robocar three months ago in Las Vegas. AWS DeepRacer is a fully autonomous vehicle, worthy of a Level 5 rating, at 1/18th the scale of a real automobile. The purpose of the toy is to lure machine learning scientists to its Cloud Server, enabling engineers to easily simulate unstructured environments within a real moving vehicle.
“This is the world’s first global autonomous racing league open to everyone,” proclaimed Andy Jassy, CEO of Amazon Web Services (AWS), at the company’s annual cloud-computing gathering.
Similar to DeepRacer, AWS had its origins as an internal initiative to support third-party vendors. A decade and a half later, it has become its own profitable business unit. As no one knows where all this is headed, I am reminded of Jassy’s reflection on the founding of AWS: “I don’t think any of us had the audacity to predict it would grow as big or as fast as it has.”