Amazon‘s Drive Towards Sustainable Transportation
Transportation is a key element in Amazon’s (AMZN) delivery network. With Amazon’s commitment towards achieving zero carbon by 2040 as part of The Climate Pledge, it is crucial for Amazon to rework on how its packages move around. It is going to be a long journey, but Amazon has already begun innovating, developing, testing, and collaborating on alternatives which can deliver packages to its customers with lesser and eventually no carbon footprint.
Here’s an overview of its initiatives to create a sustainable transportation ecosystem.
Amazon’s electric delivery vehicles by Rivian were rolled out February 2021. The company expects that its electric vehicle deliveries will reach up to 15 additional U.S. cities by the end of the 2021. Amazon plans to have 10,000 vehicles on the road as early as 2022, and all 100,000 vehicles deployed by 2030. Amazon has been investing in Rivian over last two years. Rivian first announced an equity investment round of $700 million led by Amazon in February 2019, and in September, Rivian announced that it was developing an electric delivery van utilizing its skateboard platform and that 100,000 of these vans had been ordered by the e-commerce giant.
Amazon is partnering for sustainable deliveries outside the U.S. as well. In August 2020, Mercedes-Benz joined The Climate Pledge, and entered its largest electric vehicle commitment, which aimed at providing more than 1,800 electric vehicles to Amazon’s delivery fleet in Europe during the year. The order comprised of the eSprinter, one of the newer electric commercial vans, and the eVito, which is a midsize electric van. In February 2021, Amazon partnered with Mahindra Electric in India to further strengthen its commitment towards electric mobility in the country. Back in January 2020, Amazon has committed that its fleet of delivery vehicles will include 10,000 EVs by 2025 in India. The company has been working with several Indian OEMs to build a fleet of vehicles.
Amazon is investing in solutions that can help decarbonize its freight transportation network. In 2020, Amazon bought battery electric trucks from Electric Lion. In February 2021, the e-commerce giant ordered hundreds of trucks that run on compressed natural gas (CNG) from a joint venture between Cummins (CMI) and Vancouver-based Westport Fuel Systems (WPRT).
Developing the electric vehicle infrastructure is crucial, and Amazon has invested in developing network of charging stations for its partners. One such example is the largest deployment of electric mobility in the German Amazon logistics network in July 2020. The Essen delivery station is equipped with 340 charging stations and operates over 150 electric delivery vehicles every day to deliver Amazon parcels to customers in the Ruhr area.
Amazon is exploring a range of alternative delivery methods dubbed as ‘micro-mobility’ to increase efficiency and reduce emissions. The company has a bicycle fleet which includes traditional bicycles and pedal-assist electric bikes connected to cargo trailers. These are being used in cities such as New York, Tokyo, and Paris. In addition, it operates e-cargo bikes in few U.S. cities. In 2021, more e-cargo bikes, and electric scooters will be seen making deliveries across the U.S., and Europe.
The company has been developing and testing fully electric, self-driving delivery devices. Amazon Scout was introduced in January 2019. Its field testing began in a neighborhood in Snohomish County, Washington, and was gradually introduced in Southern California by August 2019. Amazon Scout has continued to operate during the pandemic. Scout’s field testing has recently started at other locations. In July 2021, the company announced the creation of a new Amazon Scout Development Center in Helsinki, Finland focused on autonomous delivery technology. The new team will be dedicated to research and development for Amazon Scout. In addition to Scout, tests are being conducted for Prime Air drones which electrically powered autonomous devices. The global autonomous last-mile delivery market is expected to be valued at $11.90 billion in 2021, and is projected to reach $84.72 billion by 2030, registering a CAGR of 24.4%.
Amazon has been supporting innovative ventures which offer groundbreaking products and services that help companies to reduce carbon impact and operate more sustainably through The Climate Pledge Fund, which was launched in June 2020. During this one year, many companies have been supported by the fund. ZeroAvia, a startup focusing on hydrogen-electric aviation solutions, received an investment in December 2020. In January 2021, Amazon invested in Infinium to support decarbonization efforts. Infinium is focusing on converting carbon dioxide and hydrogen feedstocks into net-zero carbon fuels for use in air transport, marine freight, and heavy truck fleets.
Amazon’s Climate Pledge Fund was among the investors in Turntide Technologies, makers of the most efficient motor system in March 2021. This was followed by its investment in May 2021 in BETA Technologies, builders of Electric Vertical Take-Off and Landing (eVTOL) aircraft. Some of the other names on the list are CarbonCure Technologies, Pachama, and Redwood Materials in September 2020. Amazon has continued to participate in funding rounds by Rivian through 2020 and 2021. In July 2021, Rivian closed a $2.5 billion private funding round led by Amazon’s Climate Pledge Fund.
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