How Amazon Became the Largest Private EV Charging Operator in the US
bloomberg.com
bloomberg.com
Makes so much sense. I wonder how many (tens of?) thousands a single warehouse location might save per day in gas alone. Last mile in urban/suburban areas is nearly ideal for an EV.
The upfront is very expensive with all the ancillary costs, but it’s hot to pay off handsomely after a while. And if a real carbon tax were to ever appear it would be all the better.
For the ICE car, that's ~6.2 mi/dollar, for the EV it's ~31.8 mi/dollar. ~5x cheaper per mile to drive the ICE. I drive ~15k miles per year, so ~$2.4k in gas, or $470 in electricity - saving ~$2k/year.
This doesn't take into account the lower total cost of ownership of EVs in general. They're simple. They don't need oil changes. The transmission can't go out.
And that's just for me driving once or twice a day; I'm sure the Amazon drivers are putting factors more miles on their cars, so a faster break-even point.
It seems like only a matter of time before other similar vehicles that are more industrial make this shift (eg, garbage/recycling trucks). Imagine no more super loud garbage trucks in the mornings…
So they have an incentive to floor the throttle, and slam the brakes. The drivers don't pay for fuel or brake pads out of their salary, the company does, but if they drive like a maniac, they can finish a few hours earlier.
https://group.vattenfall.com/press-and-media/newsroom/2023/s...
Solar > battery means DC fast charging gets to skip AC>DC losses which are significant. But you don’t need to use 100% of solar’s output to save a lot of money.
As long as you’re using less electricity from the grid overall per day, you’ll save money in the long run.
https://www.globalenergyinstitute.org/average-electricity-re...
The reason PG&E rates are skyrocketing in California - https://news.ycombinator.com/item?id=40128003 - April 2024 (26 comments)
After 111 years, SF finally moving to oust PG&E and create a public-power system - https://news.ycombinator.com/item?id=39587901 - March 2024 (13 comments)
https://www.spglobal.com/commodityinsights/en/market-insight... | https://archive.today/PeDeH ("April 2024: CAISO sets back-to-back solar peak records in April; power spot prices plunge")
> Spot power prices have been trending lower year on year on lower natural gas spot prices and more renewable generation supply, including hydropower following years of drought.
> CAISO has 19.011 GW of installed solar generation capacity, which accounts for the majority of renewable resources on the grid at 62%, according to the Key Statistics report. Solar capacity has increased nearly 15% compared to a year ago and 26% from two years ago.
> There are currently 28.6 GW of solar projects in the CAISO generation queue, including 13.8 GW that have executed interconnection agreements and nearly 4.5 GW of those have on-line dates expected listed for 2024. Only two solar projects slated to come online in 2024 do not have batteries connected.
https://app.electricitymaps.com/zone/US-CAL-CISO ("ElectricityMaps.com: California CAISO Zone")
Are transmission failures really that common? In nearly fifty years of driving and owning eight different cars I've never had a transmission failure. One of the cars (Volvo Amazon estate car) did 350k miles including the previous owner rallying it for a couple of years. Apart from fixing a leaking radiator when I bought it I never had any problems with the motor or gearbox. We scrapped it just because my wife wanted a newer more comfortable car.
That 2002 model is supposed to be a lemon transmission-wise though (even so, 300k seems decent as far as lifespans go).
All that said, electric cars really shine in city driving. No transmission to go, and regenerative braking to save the pads. It’s valid to call it out if that’s your use case like these Amazon trucks.
Clutches wear out, and it is possible to wear out an automatic transmissions' clutches, but I've never had it happen.
Every car I've sent to the junkyard has had a working transmission.
It's a different level of wear and tear than a normal commuter passenger vehicle.
I think the bigger savings on a delivery van would be brakes. In constant stop-start driving using the motor for regenerative braking is both an efficiency saver and reduces wear and tear on the mechanical brakes.
GM on the other hand went the exact opposite direction most of the time and put an overengineered heavy duty transmission with maybe slightly cheaper internals into their smaller vehicles.
Eh, the owners of 80's era Chevy Celebrities/Pontiac 6000s/Oldsmobile Cieras/Buick Centuries might like a word.
Transmissions are tough because they endure a lot of extreme forces. Shift points have the risk of slamming components together.
And then sometimes things aren't built as designed. The ford HF35 hybrid transmission should be pretty reliable as designed, but many of them were built with bearings (or something) that went bad, leading to an early salvage date for many C-Maxes.
Fuel:
Petrol: (Gasoline) USD7.10/US Gallon
Diesel: USD7.47/US Gallon
Electricity:
Domestic: USD0.36/KWh
Charging network: USD0.70 - USD1.01/KWhBut for Amazon their drivers are constantly doing stop/starts, which is horrible for fuel efficiency.
So I bet their numbers are way better. And I wasn’t including maintenance which as you mentioned should be tremendous.
But if the expected lifetime is “as long as I can drive it,” then TCO is probably not lower, simply because the maximum lifetime of an EV is lower than that of an ICE vehicle. At some point the car will fail – it will need battery replacement (every X years), or it will depend on obsolete infrastructure, etc.
You can drive a 1960 Cadillac today. Will you be able to drive a 2020 Tesla in 2084?
Interesting to hear you say that. I've been looking for them but I've still never seen an Amazon EV in the DC metro area.
I don’t know if we’re a test site or it was just easy to get the power installed or what. Perhaps being a new facility meant they just needed new vehicles anyway so it made sense to not buy gas.
But once they started appearing they kept getting more common.
Careful with that.
The delivery fees may not be explicit, but they definitely charge more for items at some stores, with Costco being one of the more egregious ones.
https://www.reddit.com/r/Frugal/comments/1cal0ff/comparing_c...
Short answers:
- Yes, they mark up. 24%ish.
- Markup may be different when shopping on IC directly versus Costco same day delivery (via IC).
- Coupons like 50% off orders over $xx changes that math.
- Factor in tip into the equation.
Different views of the future.
Jokes aside, I save money by using grocery delivery.
1. The CO2 of the Amazon delivery needs to be taken into account (apportioned to the number of drops), vs delivery to store. Delivery to stores is highly efficient compared to last mile.
2. Most Amazon purchases probably wouldn't directly result in less trips to the supermarket (i.e. am I driving to the supermarket just to pick up one item, or am I going there anyway and picking up everything I need when I am there?)
Between that and shopping for fresh meat and produce at ethnic markets that are all over the city, the vast majority of my shopping is amortized over staple groceries that I can’t or won’t buy online.
For use cases like this, the last mile is carbon neutral.
Edit: Re-reading my comment, it comes across as if there were no walkable cities in the US. That was not my intention. Of course there are, but from what I've seen, not that many. Also, somehow there is a lot of political opposition to them, because of certain conspiracy theorists who seem to have taken over one of the political parties. And since there are only two worth mentioning, the situation is unlikely to improve.
Does Amazon hope that this investment in EV's and EV infrastructure will put them in a good position to sell EV's at some future point?
Maybe it'll give them a few years of de-facto monopoly in some cities/states that pass laws requiring all deliveries be carbon free?
Maybe being top of 'low carbon' company lists alone is worth it if that means they attract environmental conscious shareholders?
Maybe this is cheap positive PR which is cheaper than just spending an equivalent amount on adverts?
For a company so laser focussed on financial efficiency, the move to EV's doesn't seem to make a lot of sense.
And long-long-term maybe some kind of integration with Zoox for an tsla/uber like delivery experience (with drones?).
Are they more expensive year one? Sure. New vehicles + chargers + infrastructure upgrades.
Year 5? Maybe it’s paid off. Energy costs, brake pads, no oil changes or other frequent maintenance.
When you refresh the EVs the infrastructure is still there, that’s one time. Gas prices go up? Your investment looks even better. Carbon tax appears? You’re golden.
Amazon must know it’s worth it. You don’t spend that kind of money for good PR alone.
EDIT: Hrm, no, a Ford Transit is also way more expensive in the US than in Europe. Wonder what's going on there. Is it just limited competition/more niche part of the market or something?
You can ignore any environmental impact, the main driver for this is that it's much cheaper to operate an EV van for last-mile deliveries.
And does Amazon own the warehouses outright, or do they lease them?
Why not just double your fleet size instead?
That's a bit extreme, but this is the kind of optimization that your bean counters are good at. You probably don't need to double your fleet but just keep enough that you can shift the consumption curve or take advantage of price changes.
(Not private thank you very much)
I wouldn't be surprised if Tesla has more public chargers than anyone else on this list.
I'm currently living in an apartment complex that has "public" charging stations, and most of them are on reserved parking spaces.
You don’t want it for road trips or in place of a home charger. It’s too slow. You want DC fast charging.
But for something like Amazon who has vans sitting overnight it’s much cheaper and more than adequate.
Even if they dog-fooded EC2 internally first, all the public documentation I can find seems to suggest that they were always considering it as a product they would eventually sell.
Regardless of the specific timeline of AWS and its associated products, I think it's a bad (or at best shallow) comparison if you're trying to forecast Amazon's relationship to EV charging. Most tech companies build massive infra for their internal use and never open it to the public, seems way more likely that their EV charging infra would fall into this case than become anything similar to AWS. Especially when you consider the magnitude of difference between filling your parking lots with chargers, vs. brokering power between utilities and EV drivers. Nobody's arguing that Amazon is going to open a chain of gas stations, despite the fact that a few years ago they probably had a massive fuel distribution infrastructure.
edit: found more detail here: https://www.zdnet.com/article/how-amazon-exposed-its-guts-th...
Definitely the idea of selling EC2 was there from the start, relevant quote is:
> Pinkham thought about this issue and, in 2003, started trying to build an "infrastructure service for the world". His hope was that he could develop a service that would not only deal with Amazon's infrastructure, but also help developers.
To get there, Amazon had to learn how to pick up the phone and call the power company. Electric utilities, which to that point primarily dealt with electric vehicles through powering the odd home car charging setup, encountered a new type of customer in Amazon.
Amazon is very often in a position to dictate terms of an agreement, but here they needed the utility's assistance. Amazon had to figure out how to negotiate the landscape.
Want to charge 200 vans? Now you’re talking megawatts. You have to talk to the utility about upgrading their lines and stations and such.
“Hi. PG&E? We want to 100x our overnight power usage! That’s good right?”
That’s not a normal call they’d have had to do before.
For a company at scale as amazon, they are a major consumer of equipment and the sourcing of that equipment is also a corporate operation.
Draw attention to https://www.epa.gov/greenvehicles/electric-vehicle-myths#Myt... specifically the lifecycle green house gas chart.
(breakeven is 15k miles with Redwood's recycling)
An EV may have fairly high CO2 emissions during production, but much of that is associated with mining of metals/minerals. Those are generally recyclable. Large scale commercial recycling of EV batteries is already happening. So those CO2 emissions are not for just one vehicle. It’s for many vehicles far into the future.
The CO2 emissions from burning fossil fuels will never benefit anything but the one vehicle it’s propelling forward.
You’ve also gotta keep in mind that the mining and industrial transportation sector is also being decarbonised, sometimes with the same EV technology that EV cars are made with. Electric mining dump trucks is now a reality. Keep the long term picture in mind: we actually have a very viable pathway to eliminate whatever minor CO2 emissions are associated with EVs by just pouring more investments and R&D into EV technology.
"""Transportation activities generate carbon emissions through the combustion of fossil fuels when vehicles are driven, the manufacturing of vehicles, and the supply chain for fuels. The emissions model for transportation covers emissions associated with “well-to-wheels” impacts (e.g.,extracting, refining, distributing, and consuming transportation fuels) and “vehicle” impacts (e.g., manufacturing, maintaining, and disposing of vehicles). These impacts are reported as emissions factors based on grams of CO₂e per kilometer basis."""
Tldr; for consumer vehicles, break even point for emissions was roughly 40k miles in the EU, and 50k in the US. After that it was a ~net positive vs equivalent gasoline model. For commercial use cases where 50k miles can be done many times over in a single year (and expected vehicular lifecycle is much much longer), it should be pure gravy.
That's why you need to enforce flaring (burning the methane and releasing CO2 into the atmosphere) because that's better than simply venting the methane.
https://en.wikipedia.org/wiki/Gas_venting
> Gas venting, more specifically known as natural-gas venting or methane venting, is the intentional and controlled release of gases containing alkane hydrocarbons - predominately methane - into Earth's atmosphere. It is a widely used method for disposal of unwanted gases which are produced during the extraction of coal and crude oil. Such gases may lack value when they are not recyclable into the production process, have no export route to consumer markets, or are surplus to near-term demand.