Amazon elbowing its way into new services is how the spunky online bookstore founded by Jeff Bezos turned into a tech giant—thereby becoming an e-commerce and cloud-computing colossus. But the Seattle-based company is much more than that. It’s a gaming streaming company, movie and TV production distributor, grocery store chain, comic book distributor, and so much more. Amazon has wiggled its way into new industries in its search for global commerce domination. And recent investments in two automotive startups could signal a move to disrupt the automotive industry.
It’s unclear to Morgan Stanley auto analyst Adam Jonas if Amazon is a friend or foe to the automotive industry, according to an interview he had with CNBC. Jonas says Amazon’s investment in two automotive startups—Rivian and Aurora—could rival the likes of General Motors. Rivian is a Michigan-based electric vehicle startup while Aurora is developing autonomous vehicle technology.
Those two companies could position Amazon against GM’s electric and autonomous vehicle efforts, including Cruise Automation, GM’s AV subsidiary. However, the investment could be part of Amazon’s plan to make half its deliveries carbon neutral by 2030. Amazon is already hauling some cargo using self-driving trucks from Embark, according to CNBC. While there were rumors GM was considering investing in Rivian, the automaker has yet to do so. However, General Motors is undergoing a restructuring that’ll focus resources on electric and autonomous vehicles. The automaker once gone on record that it will introduce 20 EVs by 2023.
Amazon’s interest in the automotive industry is fascinating. Amazon’s model for success involves disrupting existing markets with low prices and convenience. Look at the damage Amazon left in its wake as it became the go-to bookseller. Big-chain book stores folded while those that remained struggled to survive. If Amazon isn’t a benign player in the automotive space, the company could cause plenty of headaches for General Motors and others.
Something to consider is that Amazon did recently hire Alicia Boler Davis, GM’s former executive vice president of global manufacturing. While tech giants like Amazon and Google are wildly averse to low margin businesses with massive overhead – which is what the auto industry has always been – something definitely appears to be afoot.