Last week, The Wall Street Journal reported Amazon was in “advanced” discussions to purchase Zoox at a significant discount to the $3.2 billion valuation it achieved during a 2018 funding round. A company spokesperson said Zoox would “not comment on rumors or speculation” regarding a potential sale.
Succeeding in any one of its three simultaneous endeavors would be a capital- heavy proposition for Zoox, which has amassed $955 million to date. During the coronavirus pandemic, with fresh funding difficult to come by, accomplishing all three has become cost-prohibitive.
“It’s a tough business, and they chose a particularly tough path,” Sam Abuelsamid, principal analyst at Guidehouse Insights (formerly Navigant Research), told Automotive News. “From a purely technical standpoint, it’s a wise decision. Anyone who succeeds in this will use vehicles specifically designed for robotaxi service. From a business perspective, it’s a challenge.”
Whether Amazon or other prospective suitors would be interested in running that robotaxi business — or using Zoox’s bespoke electric vehicle platform at all — are intriguing questions.
While some observers have surmised an Amazon acquisition suggests the retail giant would seek to compete with the likes of Uber and Lyft, Abuelsamid and Asad Hussain, mobility analyst at PitchBook, see the potential match more as a chance for Amazon to add to a burgeoning logistics empire that competes with UPS Inc. and FedEx.
“First and foremost, this is about expanding delivery capability and middle-mile, last-mile delivery capabilities,” Hussain said.
“Zoox’s modular electric platform enables that. And Amazon has clearly been very interested in the autonomous future. Right now, this is them being opportunistic and taking advantage of market conditions favorable to buyers.”
