From the November 2020 issue of Car and Driver.
While everyone waited with bated breath for an Apple car, Amazon extended its reach into the automotive landscape far and wide. Building and selling new vehicles is big business, but it's only the tippity top of the industry iceberg. Hundreds of thousands of car businesses exist beyond assembly plants and dealerships. Here's where Amazon's presence is having the biggest impact.
Parts and Accessories
According to automotive marketing agency Hedges & Company, the online parts and accessories market is expected to exceed $16 billion in 2020, with $10.3 billion of purchases made through Amazon. To make online buying easier for consumers, Amazon has established partnerships with local installation outlets, and the Amazon Garage makes recommendations for replacement and aftermarket parts based on the vehicle information users store in their accounts. Amazon claims that tens of millions of consumers have already virtually parked their vehicles in that garage.
In June, Amazon signed an agreement to acquire autonomous-vehicle startup Zoox for a reported $1.3 billion. Amazon says it's committed to Zoox's original mission to create a network of self-driving taxis, but it's easy to imagine the technology also being deployed to deliver packages while cutting out human drivers. Even if Zoox's dream goes unrealized, Amazon technology could materialize in self-driving cars built by competitors. Right now, for example, Toyota Research Institute is using Amazon systems to process data during its autonomous-vehicle development.
Amazon Vehicles is the company's initial foray into providing consumers with vehicle-purchasing information. Right now that consists primarily of new and used-car reviews that you might want to look at after you've exhausted the resources on CarandDriver.com. The obvious next step would be for Amazon to list inventory and connect buyers with local dealers that have the vehicle they want. In 2016, Fiat partnered with Amazon to sell cars at a discount in Italy. Due to U.S. franchise laws, that kind of thing won't happen here anytime soon, but as more elements of car buying move online, Amazon could play a huge role in brokering sales between dealers and buyers.
Manufacturers, dealers, and intermediaries already use Amazon products behind the scenes to sell vehicles. BMW's configurator runs on the company's servers, and Kelley Blue Book uses Amazon Lex language bots to allow consumers to ask trade-in questions in natural language. Throw in dozens more digital initiatives and Amazon could wind up involved in most new-vehicle transactions—even if consumers aren't aware of it.
Why get into the complicated business of building vehicles when you're rich enough to have someone else do the dirty work? EV startup Rivian is designing an electric cargo van for Amazon, which has already ordered 100,000 of them for delivery by 2030. That order, plus a $700 million group investment led by Amazon, makes Rivian's expensive move to high-volume production far more likely. Amazon will also establish a charging network to support those vans. Maybe someday, free charging will be a nice perk for Amazon Prime members.
Amazon's Alexa voice assistant has been integrated into roughly 100 different vehicles, allowing drivers to check the weather forecast, open a garage door, and turn on lights in their home on command. One of the newest features allows users to pay for gas at more than 11,500 Exxon and Mobil stations in the U.S. Using a compatible vehicle or phone, you simply say, "Alexa, pay for gas," and the service automatically identifies the pump you're at and initiates payment with the default credit card stored in your Amazon account.
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