Amazon Takes a Big Hit on Electric Delivery Vehicle Investment

Amazon will continue to drive its electric delivery vehicle (EDV) strategy forward, despite a pre-tax loss of $3.9 billion in non-operating expense from its investment in EDV manufacturer Rivian, the retail giant said in its second quarter earnings report Thursday.

The company has already started making customer deliveries with Rivian EDVs in select cities across the United States, with a plan to expand to thousands of additional EDVs in more than 100 cities by the end of this year. The goal is to have 100,000 EDVs making customer deliveries across the country by 2030. 

Net sales for Amazon increased $121.2 billion in the second quarter, 7% higher than the $113.1 billion reported in the second quarter of last year. In the upcoming quarter, Amazon expects net sales to grow between 13% and 17% to $125 billion and $130 billion respectively.

“Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” said Andy Jassy, Amazon CEO.

“We’re also seeing revenue accelerate as we continue to make Prime even better for members, both investing in faster shipping speeds, and adding unique benefits such as free delivery from Grubhub for a year..." and more, Jassy said in a statement.

In the grocery space, Amazon has opened 12 Amazon Fresh stores across the United States and the United Kingdom, and introduced the next generation Amazon Dash Cart. The new Dash Cart, which has expanded to its first Whole Foods Market store, uses computer “vision algorithms and sensor fusion,” is larger, and can be brought to shoppers’ cars.

The company is also continuing to work with leading retailers and stadiums to equip third-party locations with Just Walk Out technology. Recent store openings include the Walk-Off Market at T-Mobile Park in Seattle, Wash., and the Hudson Nonstop store in the Nashville International Airport. Three more  stores are set to open at Texas A&M’s Kyle Field later this year.

This quarter, Amazon also worked to expand SNAP EBT benefits in 48 states and Washington, D.C., covering more than 99% of SNAP households. Amazon customers can use SNAP benefits at Amazon.com, Amazon Fresh, and Whole Foods Market.

Prime Air drone deliveries will be available to Lockeford, Calif., and College Station, Texas, customers later this year. Amazon customers in these locations will be among the first to receive free drone delivery on thousands of items.