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.
Comments
I know this isn’t what this article is directly implying — but imagine if there was ONE vehicle from Amazon that almost everyone would want. Say an electric car with jawdropping mileage, about the size of the XT4, surprisingly nice (yet frugal interior), great ride, comes in any color or two-tone you want — at a surprisingly YES price.
No ads needed since it would be an Amazon product. Only one car to make and it would be released with lifelong warranty. Maybe a loss leader because the interior nav screen would allow you to do all sorts of things.
What the VW Bug was to one generation — this would be to this generation. Talk about disruption.
Everyone driving the exact same thing and wearing uniforms to boot! Wouldn’t want to be different, you know…
Sounds like a Communist totalitarian state to me. Scary.
Joe,
It works very well for the Chinese Communist Party and they’re taking over the world with the help (willingly or not) of the West.
China is failing it is about to get worse for them.
Meanwhile, did you see the front page of the NYT today? NO TRUMP-RUSSIA COLLUSION!
Great to see our President stand up to the fake news lies and take on the Chinese at the same time.
If there’s no collusion (and that’s IF), there sure is plenty of corruption with Trump.
…
GM sales down…
GM profits down…
GM vehicle rebates large and increasing fast…
GM closing plants and firing thousands of workers…
GM China gamble a failure and about to get worse…
GM stock continues to drop big time…
GM CEO Miss Mary Barra is a failure and needs to go. Period….
John Hart sounds like Hitler and his little everyone will drive the same VW Beatle in the world dream.
Scary thought.
I would love it for nothing more than to remove the stealership for the car buying process.
Are you referring to the local businesses that employ about a hundred people on average and support the local communities sponsoring little league baseball and soccer teams? Maybe you’re referring to the local businesses that employ highly skilled technicians to repair all the wonderful product problems. You know, the Terrain timing chains that stretched, the Enclave transmission wave plates that cracked, the Sierra 5.3 piston ring failures to name a few. Sounds like you may have had a bad experience some where. On behalf of all the hard working honest car dealers I apologize. You may want to have a conversation with a Tesla owner who experienced a warrant service issue.
You didn’t even read what he said. He said of “the car buying process”; it’s the process of which one BUYS a car. Servicing is not at issue here, nor is local employment or the sponsorship of little league teams.
You don’t need a dealer to buy a car (re, Tesla, Mercedes (at least here), and once Saturn), and you sure as hell don’t need one to fix it, or support a community.
He means those on the showroom floor that perpetually get in the way of the buyer and demand a cut of the buyers money for offering no direct services. THAT kind of behaviour is unacceptable of the dealership model.
You cannot equate a dealer in the showroom to the skilled technicians. The skilled trades are to be commended and respected for their service. A dealer is undeserving of anything but scorn and public ridicule.
Yup, more proof Grawdaddy hasn’t made it past the 8th grade.
Well, go on then.
Educate me. Put up a counter-argument.
Tell me why dealers are needed.
You are right, little Buick Dealer. The amount of destruction Amazon has caused to businesses around the world is disgusting. Worker respect and fair pay? Forget that because under Amazon it hires and fires at will, part time with no real benefits to boot. Oh, and don’t mention it manipulates/ uses the tax-payer funded U.S. Postal system to get below-cost rates to expand it’s empire. Yup, your taxes help finance the destruction of American businesses small and large. Genius!
Meanwhile it’s bald-headed Messiah leader who is too scared to face his own employees without heavily armed security (yup, with guns) makes billions while others suffer.
Market capitalisation: Ford 34B, GM 51B, Google 840B, Amazon 867B, Tesla 46B.
Google and Amazon will be formidable competitors in the auto industry, when combined with their portfolios, which includes automation. And they have nearly unlimited resources. With the world market becoming incredibly competitive with the Chinese onslaught beginning in 2020, Ford and GM are much too small (in valuation) to successfully compete due to limited capital. IMO, for the same reason, Tesla will not remain independent and their current leadership is more representative of a start-up than a major corporation.
Google will be broken up soon for anti-trust, anti-competitive practices.
Mark my words…