Beatrice Lang
In 2019, Amazon announced its plan to buy 100,000 electric delivery trucks from the US-based electric vehicle startup Rivian. The deal, worth $10 billion, is a significant moment for the EV trucking industry and a turning point for the EV market, as it will likely accelerate the electrification of fleets. Amazon's move is part of its climate pledge to ensure its operations emit net-zero greenhouse gases before the middle of the century and meet the Paris Agreement 10 years ahead of schedule.
| Characteristics | Values |
|---|---|
| Number of electric vehicles ordered by Amazon | 100,000 |
| Type of vehicles | Vans, SUVs, Pickups, Trucks |
| Company from which the vehicles are ordered | Rivian |
| Year of announcement | 2019 |
| Year of delivery | 2021 |
| Year by when all vehicles will be on the road | 2024 |
| Amount of investment by Amazon in Rivian | $700 million |
| Total amount of investment raised by Rivian | $1.7 billion |
| Other investors in Rivian | Ford, Cox Automotive |
| Amount of investment by Ford in Rivian | $500 million |
| Amount of investment by Cox Automotive in Rivian | $350 million |
| Location of vehicle assembly and production | 2.6 million sq. ft plant in Normal, Illinois |
| Location of software, battery, and control systems manufacturing | San Jose, California |
| Location of physical component manufacturing | Outside Detroit |
| Price of vehicles | $70,000 |
| Mileage on a single charge | 400 miles |
| Time taken to reach 60 miles per hour | Under 3 seconds |
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What You'll Learn
Amazon's $700 million investment in Rivian
Rivian, founded in California in 2009 by Robert J. Scaringe, is a relatively new player in the electric vehicle industry. The startup made its debut at the 2018 Los Angeles Auto Show, unveiling its R1T pickup truck and R1S SUV prototypes. With Amazon's investment, Rivian secured its position and attracted further attention from investors, including Ford Motor Company and Cox Automotive.
The $700 million funding round in February 2019 was a pivotal moment for Rivian, propelling the company into the spotlight and solidifying its potential. Following the investment, Rivian announced plans to release its electric pickup truck by 2021 and expand its workforce significantly. The company's electric vehicles are designed with impressive specifications, including a large battery pack mounted under the floor, offering a range of up to 400 miles on a single charge, and accelerating from 0 to 60 miles per hour in under three seconds.
Amazon's investment in Rivian goes beyond financial support. The e-commerce giant has also placed a significant order for 100,000 electric delivery vans from Rivian, with expectations to have them on the road by 2024. This order is a crucial step in Amazon's pledge to eliminate its carbon footprint by 2040 and achieve net-zero greenhouse gas emissions by the middle of the century. Additionally, Amazon's commitment to renewable energy sources aligns with its goal to transition its vast freight delivery fleet to more sustainable options.
The partnership between Amazon and Rivian showcases a strategic alignment between the two companies. Amazon gains access to cutting-edge electric vehicle technology, while Rivian benefits from Amazon's backing and market influence, leading to exponential growth. This mutually beneficial relationship positions both companies for success in their respective endeavours, with Rivian poised to become a serious rival to established players in the electric vehicle market, such as Tesla.
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The Climate Pledge
In 2019, Amazon co-founded The Climate Pledge with Global Optimism, becoming the first signatory of the pledge. The Climate Pledge is a community of companies, organizations, individuals, and partners, working together to solve the climate crisis and decarbonize the economy. The pledge calls on signatories to reach net-zero carbon emissions by 2040, a decade ahead of the Paris Agreement.
Amazon has committed to reaching net-zero carbon emissions across its global operations by 2040. The company has improved its carbon intensity by 24% and reached its goal of matching 100% of the electricity it uses with renewable energy in 2023, seven years ahead of schedule. Amazon also has more than 24,000 electric delivery vehicles on the road globally and has removed plastic air pillows from all delivery packaging at fulfillment centers globally.
Amazon's commitment to The Climate Pledge is supported by AI-based tools built on AWS. Amazon's approach to decarbonizing its global network of buildings includes testing and scaling new technologies to push toward net-zero carbon emissions by 2040. The company is also expanding the use of zero-emission transportation, such as electric delivery vans, cargo e-bikes, and on-foot deliveries.
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Rivian's R1T and R1S vehicles
Amazon has ordered 100,000 electric delivery trucks from the US-based EV startup Rivian. This order is part of Amazon's efforts to eliminate its carbon footprint by 2040 and meet the terms of the Paris Climate Accord. The company plans to make its first deliveries with the vehicles by 2021 and have all the new trucks on the road by 2030.
Rivian has shown off two vehicles so far: the R1T pickup and the R1S SUV. Built on the same technological platform, Rivian claims its vehicles will be able to travel up to 400 miles on a single charge, hit 60 miles per hour in under three seconds, and eventually be able to drive themselves in some capacity. The R1T and R1S will start at around $70,000. The R1T is a huge pickup with impressive acceleration and a range of up to 420 miles. It has usable bed space and room for five people inside. It also features fast-charging capability, with the ability to charge from 10% to 80% in 30-41 minutes. The R1S SUV, on the other hand, offers massive power and impressive range but faces competitors with more affordable pricing. A special version of the R1T and R1S, the California Dune Edition, offers a desert-inspired paint job and standard off-road gear.
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Amazon's commitment to renewable energy
Amazon has demonstrated its commitment to renewable energy through several initiatives and investments. In 2019, Amazon CEO Jeff Bezos announced a plan to tackle climate change, which included ordering 100,000 electric delivery vans from the US-based startup Rivian. This $700 million investment in Rivian, along with subsequent investments from Ford and Cox Automotive, has the potential to revolutionize the electric vehicle market. Amazon aims to have these electric delivery vans on the road by 2024, with the first vans expected to start operating in 2021.
Amazon has also pledged to transition to renewable energy for its operations. The company has become the world's largest corporate purchaser of renewable energy, investing in wind and solar projects that amount to 6.5 GW of electricity production capacity. This capacity is sufficient to power 1.7 million US homes for an entire year. Amazon has set a goal to power its operations with 100% renewable energy by 2025, five years ahead of its initial target of 2030. This commitment aligns with its Climate Pledge to reach the Paris Agreement's goals 10 years early and achieve net-zero carbon emissions by 2040.
As of 2021, Amazon has enabled more than 3.5 GW of renewable energy in Europe through 80 projects. The company has expanded its renewable energy initiatives globally, with projects in South Africa, the United Arab Emirates, Singapore, Japan, Australia, China, and Europe. Amazon's first solar project in South Africa, consisting of over 24,000 solar panels, began supplying renewable energy to the grid in 2021, contributing to the country's renewable energy goals.
Amazon has also made additional large-scale investments in wind and solar farm capacity, aiming to produce clean energy equivalent to the electricity used by all Echo, Fire TV, and Ring devices worldwide by 2025. The company is addressing the challenges of maintaining a consistent power supply by investing in solar energy storage projects, ensuring that electricity grids can operate with carbon-free electricity even when solar or wind sources are unavailable. These efforts demonstrate Amazon's commitment to reducing its environmental impact and transitioning to renewable energy sources.
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The future of fleet vehicles
In 2019, Amazon announced its plan to buy 100,000 electric delivery trucks from US electric-vehicle startup Rivian. This move is part of Amazon's commitment to the Climate Pledge, which calls on participants to be net-zero carbon by 2040. Amazon's CEO, Jeff Bezos, stated that the company will get 100% of its energy from renewable resources by 2030, with 80% of its energy coming from renewable resources by 2024.
The order of 100,000 electric vehicles is the largest purchase of light-duty electric vehicles in history, doubling the number of such vehicles in Europe and North America. This purchase is a pivotal moment for the EV trucking industry, with Amazon's size and scale expected to accelerate the electrification of fleets. Amazon's investment in Rivian, along with investments from Ford and Cox Automotive, has propelled the startup to a major competitor in the electric vehicle space.
Rivian's vehicles are built on a "skateboard" platform that integrates the battery pack, drive components, and suspension system. The company's R1T pickup and R1S SUV are expected to have an electric range of up to 400 miles per charge, priced from $68,000 to $72,500. Amazon's electric delivery vans, custom-built by Rivian, will share key components with the R1T and R1S, including the battery, but will feature a unique body, interior, and software.
The impact of Amazon's adoption of electric vehicles extends beyond its own fleet. The visibility of Amazon's electric vans in neighbourhoods across the world will expose new people to the technology and could accelerate the adoption of electric vehicles by other organizations, including delivery companies, transit agencies, and ride-hail fleets. However, it remains to be seen how Amazon will handle rural deliveries, as electrified trucks may not have sufficient range to last through the day without access to charging stations.
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Frequently asked questions
Amazon has ordered 100,000 electric delivery trucks from US electric-vehicle startup Rivian.
The pricing details for the Amazon vans were not disclosed, but it is unlikely they will cost less than $40,000 per vehicle.
Amazon's purchase of these electric vehicles is part of its effort to eliminate the carbon footprint of the company by 2040. The company has committed to getting 100% of its energy from renewable resources by 2030.
