Amazon bets on truck safety with Autonomous Driving Company Plus

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In the last 18 months of the pandemic, many of us have come to rely on Amazon more than ever. An unprecedented number of Amazon vehicles have crisscrossed the world’s highways, delivering everything, down to our most basic needs, right at our doorstep. The number of warehouse and delivery drivers that Amazon hired to track during this time was unprecedented, starting with a 100,000 employee hires in March 2020, followed by another 75,000 hires in April 2020 and many others down the line. Parcel delivery is still, in many ways, the lifeblood of Amazon’s business, even though Amazon Web Services (AWS) has become a critical part of the company’s profit margins. As such, it makes sense for Amazon to play a role in developing and deploying the next generation of delivery vehicles, from long haul trucks to last mile delivery vans.

In Amazon’s 2020 Sustainability Report released this week, the company announced that it has placed an order for 100,000 new Electric Delivery Vehicles (EVs) from Rivian that it will deploy over the next decade. Today we’re going to take a look at some big moves the company is making in the autonomous vehicle (AV) field with another company that I’m following closely: Plus. Formerly Plus.ai, this Californian startup is known for its autonomous trucking platform, PlusDrive. Let’s take a closer look.

The news

This week, we learned via an SEC 8-K form from Plus that Amazon has committed to purchase at least 1,000 Plus Retrofit units for its delivery fleet in a deal worth up to to $ 150 million. As the name suggests, Plus designed these systems to modernize existing trucks with next-generation levels of range. While these vehicles will still require a human driver inside (to oversee the system and intervene if the system exceeds the system’s capabilities or fails to some extent), the deployment of the modernized fleet will always be an important step forward. both for the trucking and the audiovisual industries.

The other part of this story is that Amazon got a mandate to buy a 20% stake in Plus, tying its future even more closely to stand-alone delivery methods. Subject to the ongoing $ 150 million Plus Retrofit deal, which it has done, Amazon will have eight years to complete the mandate. Plus would receive around $ 500 million from the sale. Between that and the IPO of Plus with a SPAC (Special Purpose Acquisition Company) last month, the company appears to be having what some might call “a moment.”

I appreciate Plus’s incremental strategy of putting its driverless systems on the road and generating revenue today rather than waiting years until fully driverless technology is ready, because I think that it comes out More ahead of its autonomous trucking competitors, yet to put a product on the market. Amazon’s victory is doubly significant for Plus, given the Amazon companies that turned down the deal. TuSimple, considered by some to be the leader in space, didn’t get it. Neither Aurora, in which Amazon already has investments, nor Embark, which Amazon reportedly hired to haul freight in 2019This huge victory is a validation of Plus’s technology and strategy.

Smarter and safer

While humans will remain in the equation, for now, technology like PlusDrive promises to make Amazon delivery trucks safer, more fuel efficient, and more comfortable for drivers. Trucking can be dangerous and very often fatal. According to the National Highway Safety Administration, 2018 saw the highest level of large truck occupant fatalities in 30 years, along with a 13% increase in pedestrian fatalities from crashes involving these trucks. There are also numerous reports of truck driver shortages and high driver turnover rates. If PlusDrive can make delivery jobs on Amazon safer and more comfortable, Amazon will have a better chance of retaining long-haul drivers. Add to that a 10% saving in fuel costs made possible by PlusDrive and you can see why this technology has a clear return on investment for fleets.

Also noteworthy is the potential reduction in carbon emissions and fuel costs of autonomous trucking. VAs are one of the tactics used by Amazon to achieve its climate commitment, a commitment to meet the net zero carbon reduction target set by the Paris Climate Agreement by 2040 (10 years before the Paris deadline). This goal is a high priority for the e-commerce giant, and I think it is currently behind several of its decisions.

Wrap

Amazon’s investments in EVs and AVs over the past several years tell us that it sees technology as crucial to the future of its business. In addition to Aurora, Amazon has also invested in Lion Electric (a manufacturer of electric trucks and school buses), Rivian (an electric vehicle company) and Zoox (a company developing autonomous robot axes).

Suppose Amazon decides to proceed with the purchase of 20% of the shares of Plus. In this case, it will have even more important and diversified stakes in the future of electric and autonomous vehicles, not to mention the valuable technologies that it can use in its delivery and logistics network. Plus, meanwhile, it will have strong support from Amazon, especially if it becomes Amazon’s partner of choice for autonomous heavy trucks. Everyone wins, the mark of a good deal.

Note: The editors and editors of Moor Insights & Strategy may have contributed to this article.

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