Amazon will acquire self-driving start-up Zoox for more than $1.2bn, marking the e-commerce group’s most significant investment into the autonomous vehicle sector.
In competition with Alphabet’s Waymo, Amazon plans to work with Zoox to create a fleet of self-driving taxis. Analysts also hinted that Amazon might use Zoox to build self-driving delivery vehicles.
Amazon has also bought smaller stakes in electric truckmaker Rivian and the self-driving start-up Aurora. Amazon said Zoox would operate as a standalone business with its leadership unchanged. Jeff Wilke, who runs Amazon’s consumer business said:
“Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience.
“Like Amazon, Zoox is passionate about innovation and about its customers, and we’re excited to help the talented Zoox team to bring their vision to reality in the years ahead.”1
According to two people familiar with the deal, the purchase price, which has not been officially disclosed, is a steep discount to the $3.2bn valuation that the six-year-old Zoox had in July 2018. Talks between Amazon and Zoox were first reported in May.
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The company has been seeking a sale since May after being hit hard by the pandemic, which derailed its plans for a pilot program this year.
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Unlike its competitors in the space, Zoox’s strategy does not rely on adapting existing cars with self-driving technology. Instead, it is developing a purpose-built vehicle, with no steering wheel, that can travel in any direction.
The sector faced difficulties even before the pandemic. Waymo is the only company that has launched a true driverless service. But since its unveiling in Arizona in late 2018, the company has not expanded elsewhere. In addition to passenger vehicles, Waymo, valued at more than $30bn, is developing self-driving trucks.
Itay Michaeli, an analyst at Citi Research noted that Zoox’s rate of improvement — based on the number of times a human has to step in to disengage the autonomy — had been “notable,” adding:
“If Amazon formally enters the urban RoboTaxi race, it could clearly add some competitive pressures on the likes of Uber, Lyft, GM-Cruise and Ford-Argo.
“In fact, Amazon’s entry into the RoboTaxi space could spur deeper industry partnerships in response, likely led by the rideshare companies.”1
Analysts at Morgan Stanley said last month that Amazon’s potential to develop a “more efficient long-term delivery network” with Zoox technology could save the company $20bn a year.
According to Dealogic, the deal would be Amazon’s second-biggest acquisition since the 2009 purchase of online shoe retailer Zappos for $1.2bn. Amazon’s biggest deal was the 2017 acquisition of Whole Foods, the upmarket grocer, for $13.7bn. Aicha Evans, chief executive at Zoox, said:
“This acquisition solidifies Zoox’s impact on the autonomous driving industry.”1
