Amazon in Talks to Buy Autonomous Vehicle Startup Zoox

Amazon in Talks to Buy Autonomous Vehicle Startup Zoox

Automotive Weekly

Amazon in Talks to Buy Autonomous Vehicle Startup Zoox


Car-sharing platforms, which have suffered during the COVID-19 lockdown, see an opportunity emerging: an increase in short-distance, local trips as U.S. consumers look for a different way of getting to work and running errands. Executives from Turo, Getaround and Zipcar are hoping their pitch to customers — a means of travel that is cheaper than car ownership and sanitary — will also win business from public transit users and Uber and Lyft riders. In addition to the uptick in shorter trips, the companies also report increased use by essential workers and health care staff. “Customer confidence in travel safety can change their booking habits,” said Preeti Wadhwani, a research analyst with Global Market Insights. “Health-care providers or first responders are relying on car-sharing companies such as Turo to commute to work.”

Getaround says overall trip volume in the U.S. has declined by almost 50 percent since states began shutting down their economies in mid-March. Turo says its business also has fallen dramatically, undoing the 60 percent year-on-year growth they saw as recently as February, according to CEO Andre Haddad. Zipcar also reports an “expected decline in demand,” particularly in business travel and on university campuses, Zipcar President Tracey Zhen said in an email.

The declines are in line with changes in traffic and transportation patterns over the past three months, given the lockdowns and work-from-home directives. The most widely used transit systems in the U.S. are carrying 40 percent fewer riders than usual, according to the American Public Transportation Association. Uber and Lyft reported dramatic declines in riders in March and April.

Hyperdrive spoke to executives at Turo, Getaround and Zipcar, as well as industry analysts, to assess the prospects for different car-sharing models in a COVID-19 world. Sanitation has been a focus for all three businesses, which have updated their protocols and issued new guidelines for users. The pandemic has already claimed Maven, the car-sharing operation owned by General Motors.

Source: Bloomberg


As automakers reopen plants that were idled because of the coronavirus crisis, they should address a longstanding industry issue: way too many variations built off the same vehicle. So says Doug Betts, president of J.D. Power’s automotive division and a former Fiat Chrysler executive in charge of manufacturing quality control. He puts it this way: Most vehicles can be built in thousands of different configurations based on, among other things, a combination of engine, transmission, powertrain and optional equipment.

Source: WardsAuto


Customers with subprime credit face a double whammy, suffering more than others from pandemic-related job losses and failing to qualify for the best new-car incentives, J.D. Power says. “The decline in share of subprime is not because they can’t get access to credit,” says Thomas King, president of the J.D. Power Data & Analytics Div. and chief product officer, in a webinar this week. However, customers with subprime credit accounted for just 8% of new-vehicle loans in the week ended May 10, down from 12% in the first three weeks of March, before COVID-19 social distancing and business shutdowns took effect, J.D. Power says.

Source: WardsAuto 


The local union that represents workers at Ford Motor Co.'s Dearborn Truck Plant is asking the automaker to shut down the assembly line until all plant workers are tested for the coronavirus. The union also is asking for additional break time at the plant that builds the best-selling F-150 pickup. Finally, it wants Ford to do a 24-hour shutdown each time after a worker tests positive for coronavirus for a thorough plant cleaning.

Source: Detroit Free Press


The McLaren Group are set to make around 1,200 employees redundant across their technology, automotive and racing businesses as part of a restructure in response to the impact of coronavirus pandemic and the implementation of a budget cap in Formula 1 from 2021 onwards.McLaren Group

Half the F1 grid have placed at least some of their staff on furlough because of the pandemic, with the teams also closing their factories in a mandatory shutdown, as part of a strategy to reduce costs until the 2020 F1 season can begin.

There have been discussions about reducing the new budget cap from $175m in light of the impact of the pandemic, with a figure of $145m expected to be rubber-stamped. This will mean some F1 teams will need to restructure their respective businesses to comply.

On Tuesday, McLaren said in a statement: “Due to the ongoing impact of the Covid-19 pandemic, as well as the new Formula 1 cost cap to be introduced for the 2021 season, luxury automotive, motorsport and technology company McLaren Group has commenced a proposed restructure programme as part of a wider business plan to ensure its long-term future success.

“Subject to employee consultation, the proposed restructure is expected to result in around 1,200 redundancies across the Group’s Applied, Automotive, and Racing businesses, as well as support and back office functions.”

Regarding the figure of around 1,200, it is understood approximately 70 of those will be from the Formula 1 side of the business, but discussions are ongoing and details are yet to be finalised.



The Renault-Nissan alliance said Wednesday that they will divide up their global car business, aiming to cut duplicate spending in order to save billions of dollars a year. Instead of each company designing every vehicle they sell, Nissan Motor Co. will design the midsize cars and sport-utility vehicles, and Renault SA will do the same for small cars and compact SUVs. The hope is that by 2025, nearly half the vehicles will be built this way. As a result, the companies think they can shave up to 40% off the multibillion-dollar cost of designing the next generations of their vehicles.

Source: The Wall Street Journal


Another rental car company has filed for Chapter 11 bankruptcy as the coronavirus pandemic wreaks havoc on the travel sector. Advantage Rent A Car filed for court protection from its creditors late Tuesday, following larger rival Hertz into Chapter 11. The move comes amid a massive slowdown in leisure and business travel. Hertz is hoping to stay alive after filing for bankruptcy without a restructuring plan in place.

Source: USA Today

AMAZON IN TALKS TO BUY AUTONOMOUS VEHICLE STARTUP ZOOX, REPORT SAYS Inc. is in talks to buy driverless vehicle startup Zoox Inc., according to people familiar with the matter, a deal that would accelerate the e-commerce giant’s automation efforts.

Other companies in the automotive and chip industries have also held talks with Zoox about a potential investment, the people said. At least one other business besides Amazon has offered to buy the company, they added. Zoox is unlikely to sell for less than the $1 billion that it has already raised, according to the people, who asked not to be identified discussing private negotiations.

“Zoox has been receiving interest in a strategic transaction from multiple parties and has been working with Qatalyst Partners to evaluate such interest,” the startup said. It declined to comment on Amazon’s interest. A spokeswoman for Amazon declined to comment. Zoox had outsized ambition and financial backing. The startup wanted to build a fully driverless car by this year. However, after a 2018 funding round that valued Zoox at $3.2 billion, the startup’s board voted to oust CEO Tim Kentley-Klay. The executive criticized the move, saying the directors were “optimizing for a little money in hand at the expense of profound progress.” Analysts have speculated that the company, now run by Aicha Evans, could attract interest from Amazon or Apple.

The Wall Street Journal reported that Amazon is in advanced talks to buy Zoox for less than the $3.2 billion valuation from 2018. Amazon is willing to spend heavily to automate its e-commerce business. The online retail giant purchased warehouse robot-maker Kiva Systems Inc. in 2012 for $775 million and now has tens of thousands of robots in warehouses around the world.

Paying drivers to deliver packages is still one of the biggest costs in the company’s operation, though. CEO Jeff Bezos announced plans for drone delivery in 2013, though they have yet to materialize at scale. Last year, Amazon revealed an experimental delivery robot called Scout in the Seattle area that rolls on sidewalks like a shopping cart.

Buying Zoox could help Amazon “manage rising shipping costs that we project will exceed $60 billion by 2025,” Bloomberg Intelligence analysts Jitendra Waral and April Kim wrote in a research note on Tuesday.

Source: Bloomberg


Nissan Motor Co. reported a 671 billion yen ($6.2 billion) net loss for the latest fiscal year and unveiled a plan to turn the carmaker around by eliminating about 300 billion yen in annual fixed costs, cutting capacity and reducing the number of vehicle models. The result, the first loss in a decade and the biggest in 20 years, includes restructuring and impairment charges of 603 billion yen for the year that ended in March, the Yokohama-based company said Thursday. The four-year plan calls for production to be cut by 20% to about 5.4 million vehicles a year, and includes the closing of Nissan’s Barcelona plant in addition to one it is shuttering in Indonesia.

Source: Bloomberg


A 5 grand price cut here, a 2 grand price cut there; Musk wants your business, now. Tesla, just like every other automaker, is feeling the pressure during the quarantine and has cut the prices of almost all its cars overnight. The only one that didn’t get a break is the new Model Y SUV. The Model 3 gets a $2,000 cut, bringing the price from $39,990 to $37,990 for the Standard Range Plus trim. The cheapest model Tesla sells has a 250-mile range and gets to 60 in 5.3 seconds. The Long Range Model 3 is $46,990, and the Performance version is $54,990.

The Tesla Model S Long Range Plus, Tesla’s oldest vehicle, got an ever bigger cut of $5,000. It now starts at $74,990 as opposed to $79,990. The Performance version of that car now stands at $94,990. The bigger sedan has a 351-mile range and gets to 60 mph in a sports-car-like 3.7 seconds.

Finally, the Model X SUV, like the S, took a $5,000 price reduction, bringing the base to $79,990 while the Performance version is now at $99,990. That EV can fit seven people and has a top speed of 155 mph. However, you won’t get the full 351 miles of range that way. Nor if you continuously get to 60 mph in 4.4 seconds.

So those prices are down, and if you add in federal and state tax breaks, they go down even further. We seem to be close to the point where the two graph lines (ICE cars vs. EVs) will cross each other. But for now, let’s take a look at the competition.

The Porsche Taycan, which seems like a natural competitor to the Model S, starts at $103,800. That's more expensive than the most expensive Model S, and the performance numbers are similar, but Porsche loses on the EPA-rated range of 201 miles. However, Car and Driver tested both cars, the least efficient versions, and found that the Porsche only lost to the Tesla by 13 miles of range. That figure was extrapolated from the hard data it generated.

As for the Model X, the Audi e-tron and Mercedes-Benz EQC seem to be the logical competition. The e-tron starts at $74,800 and has a range of 204 miles while the EQC starts at $67,900 and has a range of 200 miles. Those are both way down from the Model X’s 351-mile range. They’re both cheaper; however, they both only fit five passengers.

The Model 3 is tough to compare. The best two choices are the Chevy Bolt and the Nissan Leaf. The Bolt starts at $36,620 and has a hefty 259 miles of range. That beats the Model 3 in both range and price, just not style. The Bolt isn’t a bad-looking car, but the Model 3 is certainly cooler. Same with the Leaf: It’s cheaper, but super-dorky (sorry, Mark Vaughn). The top model gets 226 miles of range while the base ($31,600) gets 150 miles on electric power alone.

Tesla had a huge head start on most of its competitors, and it has sold more EVs than anyone by a long shot. But as we move forward, look for that sales lead to shrink, as well as its technology lead. This year will probably be a weird anomaly, but as people get back to work—and try to stay away from other people—car sales, not to mention traffic, should be up to normal levels, or maybe even higher in 2021.

Source: Autoweek

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