On July 16th, according tomedia reports, Elon Musk and Jeff Bezos competed in commercial space, and Musk frequently used social media to stimulate Bezos. Musk is in a war of words with Amazon’s acquisition of autonomous car company Zoox. But industry analysts say Amazon’s acquisition of Zoox is only a short-term opportunity to automate its logistics operations with teslas.
Here’s what’s translated:
NASA faced a dilemma in 2013 when a launch pad in Cape Canaveral, Florida, became the subject of a long-running dispute between Musk and Bezos.
Musk’s SpaceX and Bezos’ Blue Origin both want to rent a 39A launch pad. Before Musk’s eventual victory, there was a war of words between the two sides.
The dispute, which continues to this day, helps explain why Musk publicly called Bezos a “copycat dog” when he bought self-driving car start-up Zoox for $1.2 billion last month. Musk believes Amazon is planning to break into self-driving cars, an area where Tesla has ambitious goals.
Perhaps to Musk’s particular annoyance, Amazon has made a good deal. Zoox recently burned $30m a month, after a previous valuation of $3.2bn. For employees who hold stock options, the purchase price means a significant reduction in their shares.
“Zoox’s self-driving system is recognized as the best,” said Sam Abuelsamid, an analyst at Market Research firm Guidehouse Insights. “They have a very good team and they have developed a very good system.”
Even with a high reputation, he says, “Zoox needs to find a home”. The company has raised $950 million in the past five years, but has not raised funds since 2018.
Mr. AbuSaamid sees the deal and lower-than-expected valuations as another sign that the self-driving car bubble is finally beginning to burst.
All progress in this area has been slower than expected and the cost of developing technology is very high. Among the victims were Starsky Robotics, an automated freight company that collapsed in March. Last year Apple acquired The Insolvent Drive AI.
In a recent wave of industry consolidation, Volkswagen partnered with autonomous driving technology company Argo AI, Hyundai partnered with Aptiv and Mercedes-Benz signed a partnership agreement with chip company Nvida.
Bezos’s current approach to getting a slice of the self-driving car market may be speculative, but it also has huge potential benefits for its business.
Bezos is more likely to expect an automated delivery fleet to make the logistics business smoother.
The advantage of Zoox in the self-driving car market is that it focuses on developing self-driving cars from scratch, rather than adding self-driving technology to existing traditional cars.
Abu Saued believes that while Amazon may eventually break into self-driving taxis, Zoox’s short-term effects may be logistical. “I suspect Amazon has adapted this vehicle to make it suitable for delivery and turned into something similar to Amazon’s mobile lockers for contactless urban delivery,” he said.
The car is technically easier to achieve than self-driving taxis and can travel slowly on pre-planned routes, making it more realistic under current self-driving technology.
Sanchit Jain, an e-commerce expert at Enders Analysis, a research firm, takes a similar approach. “Amazon’s idea of buying Zoox to play the self-driving taxi game should be dismissed immediately,” he said.
As a shrewd businessman, Bezos may also see the industry’s profitability underwhelming. A study last year found that self-driving taxi services could cost two to eight times as much as manual taxi services, potentially nullifying companies such as Uber’s idea of saving labor costs.
Last year, Amazon invested $700 million in Rivian, the maker of electric trucks, and the company has moved away from express partners such as FedEx and UPS in favor of self-built logistics.
“Amazon spent $10.9bn on global shipping costs,” Mr Jain said. “That’s up from $7.3 billion a year earlier. As they invest more in same-day transport, costs will only continue to increase… With a fleet of self-driving electric cars, you can serve our customers 24/7 without worrying about driver fatigue. “
The strategy will allow Amazon to more effectively cover the “last mile” of product delivery and reduce the cost of business expansion.
Mr. Jain said Amazon expects to invest billions more to make the technology work. “It will take years to achieve these returns,” he says. “But if Amazon can see that… There are huge benefits. “
Zoox could also match Amazon’s mysterious robotics division, which originated from Kiva Systems, which Amazon acquired in 2012. Last year, Amazon warehousehad 200,000 Kiva robots; will Amazon combine automated delivery robots with self-driving trucks in the future to create a fully automated logistics business?
The competition from Tesla, then, has had little impact on Bezos.
There is no indication that Bezos thinks he is threatened by Musk, although Musk always likes to stimulate Bezos on Twitter.
Until then, Mr. Jain said, there was little co-operation between Amazon and Tesla. “There’s really no competition between the two companies. I don’t think Amazon tried to poach Tesla employees. “
But that hasn’t stopped Musk from attacking Bezos and Amazon. “It’s crazy,” Musk wrote on Twitter. “It’s time to disband Amazon. Monopoly is wrong! “