Index Option Calls
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Index Option Calls
No Result
View All Result
Home Latest News

Amazon’s $21 billion Rivian stake is a bet that innovation can help solve climate change

by
November 13, 2021
in Latest News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

RELATED POSTS

Broadcom reportedly in talks to acquire VMware

China’s state-backed blockchain company is set to launch its first major international project

An electric Amazon delivery van from Rivian cruises down the street with the Hollywood sign in the background.

Amazon

Amazon‘s big bet on Rivian Automotive paid off this week when the electric vehicle start-up made an explosive debut on the public markets.

Rivian raised nearly $12 billion in the mammoth offering and landed a lofty valuation of more than $110 billion, higher than auto giants GM and Ford. The IPO resulted in a massive windfall for Amazon, which invested more than $1.3 billion in Rivian. Amazon’s 20% stake in the business is now worth more than $21 billion.

Rivian’s IPO was a huge success for Amazon financially. It’s also key to one of the company’s most challenging mandates — to cut the amount of damage it does to the environment.

Amazon has long been criticized for not moving fast enough to address its environmental footprint. More than 1,000 Amazon employees walked out in 2019 to urge it to do more to combat climate change, after submitting a shareholder proposal signed by thousands of employees.

In 2019, Amazon founder and executive chairman Jeff Bezos stood on stage to unveil a sweeping plan to transform the company’s climate policies and vowed that Amazon would be carbon neutral by 2040. He also announced that Amazon was placing an order for 100,000 electric last-mile delivery vans from Rivian to be delivered by 2030. Amazon hopes to have 10,000 of them on the road as early as next year.

Those goals are largely at odds with Amazon’s current reality. As the nation’s largest online retailer, Amazon delivers more than 10 billion items worldwide annually using an extensive network of gas-guzzling planes, vans, trucks and ships. It’s brought more of its transportation operations in house and dotted the country with warehouses in its quest to speed up deliveries from two days to increasingly one-day and, in some cases, within hours of an order being placed.

Bezos has previously said that same-day or one-day deliveries can lead to decreased emissions by reducing dependence on planes, while locating warehouses closer to customers means delivery vans can make shorter trips when dropping off packages, according to The Washington Post.

Transportation remains the biggest source of climate pollution in the U.S., accounting for 29% of the country’s total greenhouse gas emissions, according to the Environmental Protection Agency.

Last year, as the e-commerce giant’s business got a pandemic-fueled jolt, so did its carbon emissions, which climbed 19%. Emissions per dollar of merchandise declined by 16% in 2020.

For Amazon to make progress on its decarbonization efforts, it’ll need to keep investing in and implementing new transportation technologies. One way it’s already doing this is through the $2 billion Climate Pledge Fund, which Amazon uses to invest in start-ups developing technology that can help advance its climate goals.

Amazon’s acquisition of Zoox last year for more than $1 billion in part represents another bet on electrification. Zoox has built an all-electric, fully autonomous vehicle that’s built for ride hailing.

Amazon acquired the seven-year-old start-up in June and, at the time, gave few details about how it planned to use Zoox’s technology

Zoox

The company has been testing prototypes of its self-driving vehicle in San Francisco and Foster City in California, Las Vegas and, as of last month, Seattle. The company has also set up an office in Seattle, though Zoox and Amazon still continue to operate separately.

In the future, both Rivian vans and Zoox’s self-driving vehicles could fit into Amazon’s sprawling logistics network, by making the process of hauling and delivering goods cheaper, faster and more environmentally friendly.

But running on electricity is not necessarily a necessity for Zoox, said Bilal Zuberi, a partner at Lux Capital.

“They could have a vehicle with a combustible engine or it could also be an electric vehicle,” Zuberi said. Amazon’s primary strategy behind investing in Rivian was to “be ahead of and have a piece of” the coming wave of electric vehicles, he added.

It’s unclear if autonomous vehicles have a meaningful environmental impact. Proponents of the technology say self-driving cars will reduce traffic congestion and facilitate the growth of ride-sharing services, which could mean people take fewer trips in their own cars. Others have argued self-driving cars could lead to more people using automobiles to get around, generating greater pollution.

Amazon has made other weighty bets in autonomous vehicles. The company in 2019 invested in self-driving car start-up Aurora as part of a $530 million funding round.

Earlier this year, Amazon placed an order for 1,000 autonomous driving systems from self-driving truck start-up Plus and, as part of the deal, was given the option to purchase a 20% stake in Plus. It has also tested hauling goods on self-driving trucks made by Embark.

“[Amazon] is seeing that we’re in the very early innings of a multi-decade transformation in mobility and autonomous is going to be a huge part of that, as is electric,” said Asad Hussain, senior mobility analyst at financial data company Pitchbook. “So I think Amazon is sort of hedging its bets on all of this innovation going on and making sure they’re getting the exposure where they can in areas where, maybe in the future, it will help their core businesses.”

Amazon has also developed its own Scout delivery robot, which is a small six-wheeled electric vehicle. And it’s increasingly adding more micro-mobility delivery options in dense, urban areas, like electric cargo delivery bikes.

Amazon’s interest in decarbonization isn’t limited to its transport systems on the ground.

In May, Amazon’s Climate Pledge Fund invested in Beta Technologies, which is building an electric aircraft, as part of a $368 million funding round. Amazon has also backed start-ups developing hydrogen-powered planes and net-zero carbon diesel and jet fuels.

Amazon, which has a massive ocean shipping operation, last month agreed to switch to zero-carbon fuels for ocean freight by 2040.

ShareTweetPin

Related Posts

Broadcom reportedly in talks to acquire VMware

by
May 23, 2022
0

In this photo illustration, the VMware logo is seen on a smartphone and in the background. Chipmaker Broadcom is in...

China’s state-backed blockchain company is set to launch its first major international project

by
May 23, 2022
0

China's Blockchain-based Service Network (BSN) is planning a major international expansion project in August. Yuichiro Chino | Moment | Getty...

Asia-Pacific stocks edge higher as global concerns persist

by
May 23, 2022
0

SINGAPORE -- Shares in the Asia-Pacific region were poised to open mixed on Monday as global concerns continue to plague...

Four ‘dream jobs’ for people who love to travel

by
May 23, 2022
0

In this article NYT Many people occasionally travel for work. But for some, travel is at the heart of their...

Analysts predict tech’s next move — and name the stocks to play it

by
May 23, 2022
0

Three analysts share their outlook for tech, with one saying it's ready for a hard rally, and another naming some...

Next Post

Black Friday 2021: Here are the best deals already out (and why you should grab them)

France warns Russia over Ukraine, Moscow denies weighing attack

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:

By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.

    0 shares
    Share 0 Tweet 0
  • A California Couple Spent Eight Years Building Their Dream Retirement Home in Costa Rica

    0 shares
    Share 0 Tweet 0
  • Goldman Sachs says buy these stocks to play Web 3.0 and the metaverse

    0 shares
    Share 0 Tweet 0
  • Goldman Sachs picks new stocks to buy — and says these 5 have over 100% upside

    0 shares
    Share 0 Tweet 0
  • In his final warning, this stock trading wizard — who made big money in bear markets and crashes — called this market a bubble like no other

    0 shares
    Share 0 Tweet 0
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by www.indexoptioncalls.com
No Result
View All Result
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy

All rights reserved by www.indexoptioncalls.com