Amazon's automotive ambitions

Previously, we knew that Amazon was an American retail giant, and some people may have bought books on it. The most recent melon about " Amazon " is that the CEO of Amazon and his wife of 26 years have officially divorced. Few people associate Amazon with the automotive industry, perhaps because its CEO rarely mentions his "ambitions" in public. However, in fact, Amazon has penetrated "every aspect" of the automotive industry .

Amazon.com Inc is expanding its transportation capabilities and almost all of its businesses except for making cars. Amazon's strategy aims to leverage its strengths in logistics, cloud computing and digital services, as well as its interest in robotics, to develop its automotive business, according to Amazon executives and people familiar with the company's strategy. By investing in the automotive supply chain, forming alliances, hiring automotive industry veterans and accumulating a strong patent portfolio, Amazon is positioning itself to challenge a variety of customers and partners, from United Parcel Service to Uber.

Amazon Web Services (AWS), Amazon's cloud computing IaaS and Paas platform services, and Fulfillment by Amazon (FBA) were originally internal measures taken by Amazon to cut costs and improve service efficiency, but later expanded to corporate users. According to analysts and industry insiders, as Amazon's transportation expertise continues to grow, companies that work closely with the company will also face the risk of losing business to it.

John Ellis, a former global technologist and transportation adviser at Ford Motor Co., said businesses "should be very scared" of Amazon's move into the dashboard business as consumers care less about vehicle horsepower and more about streaming content and services.

"Crazy" patent application

Reuters analyzed more than 5,000 patents granted to Amazon by the US Patent and Trademark Office from December 2016 to May 2019 and found that at least 210 of these patents involved transportation-related fields such as drones and autonomous ground vehicles. And its car-related patents even surpassed those of tech rivals Apple Inc and Alphabet Inc's Google, whose subsidiary Waymo is also a pioneer in the field of autonomous driving.

Amazon has been awarded several patents related to transporting passengers, including a 2017 patent for providing on-demand transportation services through a network of self-driving cars, making it a potential competitor to Uber, Lyft, Waymo and major auto customers such as Volkswagen, Ford and General Motors. However, Amazon said patents don't always become reality.

While applying for a large number of patents, Amazon has also significantly increased its investment in transportation-related fields. Since February this year, the company has invested nearly $2 billion in three well-known startups, including electric truck manufacturer Rivian Automotive, autonomous driving system developer Aurora, and food delivery company Deliveroo, along with other major investors.

In the past two years, Amazon has further acquired three startups, Dispatch, Canvas and Tapzo, and invested hundreds of millions of dollars in at least nine other companies, including an Indian company Shuttl (which has developed an app that helps commuters find seats on buses), to build out its transportation ecosystem.

Amazon's business partners in this area include suppliers such as Aptiv, Panasonic and Nvidia; large transportation providers such as Uber and Avis; and self-driving heavy truck startups such as Embark and China's TuSimple.

“Industrial Cloud”

Amazon has been rapidly expanding its relationships with corporate customers through its $33 billion Amazon Web Services unit, notably this year with two cloud computing partnerships with Ford and Volkswagen.

Jonathan Allen, head of professional services for AWS's global automotive business, said the strategic alliance with Volkswagen (including German supplier Siemens) aims to create an "industrial cloud" that digitally connects Volkswagen's extensive manufacturing operations (122 factories worldwide) and up to 30,000 supplier factories. In March, Volkswagen said AWS cloud services, including machine learning and data analytics, can help it "improve factory efficiency, increase uptime, increase production flexibility, and improve vehicle quality."

AWS has been one of Amazon's fastest-growing and highest-margin businesses, providing corporate users such as BMW, Toyota, Avis and Formula One with a platform to manage, analyze and, in some cases, monetize data.

ALEXA+ Logistics

Amazon's digital assistant Alexa is leading its push into the automotive market, and Amazon is working with several automakers to embed Alexa in cars. Currently, Amazon has reached agreements with General Motors, Ford, Volvo and Honda Motor Co., so that users can place online orders in the car. Amazon's goal is to make Alexa available in as many cars as possible, either through direct integration with automakers or through car accessories with Alexa built in.

In addition to Alexa Auto, Amazon has another focus: cutting the cost of shipping packages, primarily through the company's Prime and Prime Air express delivery services (by air) and freight services.

Amazon has increased its ability to cut shipping costs by adding trucks and cargo planes, and analysts say its investments in Rivian, which has designed a flexible electric truck architecture, and Aurora, which has developed software for self-driving cars, foreshadow its eventual development of a self-driving electric truck delivery service.

Amazon, which spent more than $8 billion on shipping last quarter, according to public records, is building out its entire logistics infrastructure through warehouse automation, long-haul trucking and the use of scout robots and drones for last-mile delivery.

Electric vehicles are now part of Amazon's strategy to connect homes to the internet. Amazon is offering home charging systems for Audi's e-tron mid-size electric SUV, a move that could mean Amazon is moving into fleet management, said Roland Berger partner Stephan Keese.

Data Privacy

Amazon, Google and Apple have long faced concerns about the security and privacy of data collected from vehicles and their users. Amazon said the voice data Alexa collects from consumers will be used to "provide and improve the service."

In addition, Amazon said that the data collected by the Amazon Web Services business is "absolutely secure and confidential", and customers of Amazon's customer business cannot access the data of any other AWS customers. Currently, AWS is working with corporate customers to provide advanced data analysis and services to generate revenue from data and improve customer experience.