Amazon will have to invest many billions more than it's spending on Zoox to bring tech to market
$2.25 billion in outside funding in March, its first external financing, in preparation for the long haul.
Autonomous driving is a pure bet on the future, requiring a ton of capital to manufacture and test systems and lobby policymakers, with no certainty about when or if the market will tip in its favor. For six-year-old Zoox, which had been valued by private investors atin 2018, selling to Amazon at a discount became its best bet as the coronavirus pandemic made it particularly hard to raise capital for any company that lacks a working business model.
From here, Amazon will likely have to spend $2 billion a year in ongoing development to get Zoox technology into the market, according to people familiar with the matter who asked not to be named because the projections are confidential., managing director at TLGG Consulting, agrees with that estimate and added that $33 billion was invested into the autonomous car market last year. She predicts Amazon will likely have to invest 10 times the purchase price before Zoox is ready to roll.
While it could be a decade or more until we have fully functional and commercialized autonomous cars roaming U.S. streets, Zimmerman said that Amazon can use pieces of the technology for its last-mile delivery operations, which are core to its broader business. "Amazon is all about fast, efficient effective delivery solutions, and they have been looking into all the components that will allow for them to do that," Zimmerman said. "We might see it earlier than in mass market commercialization opportunities."
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