Amazon’s Next Big Thing Will Be Self-Driving Vehicles With $1 Billion Zoox Purchase
Autonomy is about more than just passenger cars.
Good morning and welcome back to Speed Lines, The Drive's morning roundup of what matters in the world of cars and transportation. I have good news for you today: it is Friday. Today on Speed Lines we're talking about more cuts at Harley-Davidson, Amazon's purchase of an ambitious self-driving car startup and, of course, the 2021 Ford F-150.
Amazon Buys Zoox, Here's Why You Should Care
You can be forgiven if you don't know much about Zoox, a self-driving technology startup that has one of those made-up startup-y names and doesn't generate an actual profit yet. But it's actually one of the more advanced companies getting into the autonomy game, and today, it was welcomed into the Amazon family. Though it may not seem so at the moment, this is a big deal. While I think it's fair to say Amazon has no interest in selling you an Amazon-branded car or getting into the manufacturing game, it is clearly very, very interested in the future of product delivery—and autonomy enters into that in a big way.
Zoox started in 2014 with a focus on autonomous ride-hailing vehicles. The Amazon purchase price was not disclosed, but sources tell tech news site The Information that it was over $1 billion. As CNBC notes, that's a big buy for Amazon, which save for the Whole Foods acquisition has generally kept purchases under $1 billion. (That's something Amazon and I have in common.)
Though Amazon has already begun experimenting with delivery vehicles, drones and robots, the acquisition of this 1,000-person startup can officially put the retailer as a major player in the autonomy game. Remember, it also has investments in Aurora and Rivian. The statement from Zoox and Amazon is very vague as to how they'll intend to develop this technology, but remember, autonomy is about more than just passenger cars.
Harley Makes Cuts
Now, onto a legacy vehicle manufacturer that's doing the opposite of spending money: Harley-Davidson. Time and time again, we've seen that the coronavirus economic downturn has hammered companies that weren't in strong financial positions going into 2020—see also Nissan and Ford. But the Motor Company has struggled for years with product strategy, weak sales, an aging core Baby Boomer demographic, its appeal in the U.S. market, and rising costs, among other things.
That's why it is no surprise that Harley is cutting about 140 jobs in the U.S., Reuters reports, thanks to dwindling bike sales that have a lot in common with the car sales slump. From that story:
Harley’s decision to cut jobs reflects the challenges facing U.S. companies amid a slow and uneven economic recovery. While the economy has reopened, demand for industrial and consumer goods remains depressed. First-quarter U.S. retail sales at the Milwaukee-based company dropped 16% versus a year ago as the pandemic-induced lockdowns forced about half of its dealers to temporarily close their stores.
Since then, easing restrictions have allowed the dealers to reopen. But retail sales are estimated to be down about 40% in the current quarter, according to a dealer survey published by Baird Equity Research on Wednesday.
The story says Harley is trying to conserve cash, freeze hiring, cut salaries and whatever else it can do to lower costs. How it can balance all that with its planned transition to become a "mobility company" remains to be seen. Once again, 2020 is proving to be a bad year to pivot your legacy business.
Will Buyers Go For A Hybrid F-150?
Even my cold, cynical auto journalist heart was won over by the launch of the 2021 Ford F-150 last night. It looks decent! More importantly, the tech and special features all seem very impressive. I like the gear lever that folds into the center console, or the seats you can sleep in. Good stuff.
More impressive to me, however, is what Ford's doing with the hybrid F-150: the PowerBoost model. I like that name, too. With 700 miles of range, a 12,000-pound towing capacity and, apparently, enough electric juice to power a city block, there's some interesting stuff at work here. It seems like the F-150 to get, for now.
So will buyers get it? CNN asked the same thing, and if the turbocharged EcoBoost engine and aluminum body give us any guidance, the answer is yes:
People tend to associate hybrid technology with relatively small and light vehicles that are not designed for hard work. So it will be interesting to see how well people embrace Ford's new hybrid option on the F-150. A lot will depend on how well it's engineered, and how much it can do beyond saving on gas. said Ivan Drury, an industry analyst with Edmunds.com.
Saving money on gas is important to a significant portion of truck buyers, of course. These are large vehicles that come with large fuel bills so anything that can make a dent in that is a major benefit, especially for fleet customers. But buyers also want the towing and hauling capabilities that they're buying a truck for in the first place.
Saving fuel and being able to work hard are not incompatible. A good example is Ford's 2011 introduction of its EcoBoost turbocharged V6 engine as an option on the F-150, said Drury. Originally greeted with skepticism, the EcoBoost engine was embraced by F-150 buyers once the technology proved itself capable of performing in a hard working truck, he said.
If Ford can tout all the special features on the PowerBoost, it may have a winner on its hands.
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Hybrid F-150: hit or a miss?