Can Amazon Save $20 Billion Annually with Autonomous EVs?

Amazon may save over $20 billion each year by implementing autonomous electric vehicles (EVs) for its middle- and last-mile delivery services, according to a recent analysis from JMP Securities.

The investment firm sees a major opportunity for Amazon to cut costs in its global shipping operations by utilizing autonomous driving technology alongside electric delivery vans, such as those from Rivian.

JMP highlights that fuel costs typically make up about 25-30% of the expenses for each mile in both middle- and last-mile deliveries. Transitioning to electric vehicles could reduce these energy costs by nearly 50%.

Moreover, driver wages and benefits represent more than 40% of the per-mile cost in middle-mile transport. By substituting traditional combustion engine trucks with autonomous electric vehicles, JMP estimates Amazon could lower shipping expenses by around 20% on a global scale, which amounts to approximately $1.15 saved per mile—contributing significantly to the anticipated $20 billion in annual savings.

In the short term, as Amazon shifts its last-mile fleet to electric Rivian vans, JMP projects a potential annual savings of up to $7 billion worldwide.

While the full financial benefits of autonomous technology may take some time to realize, the firm stresses that substantial cost reductions are on the horizon. JMP views this as a medium- to long-term opportunity and maintains a Market Outperform rating for Amazon with a price target of $265 per share.