(Bloomberg) — Amazon.com Inc. is partnering with Stellantis NV to develop software and buy electric delivery vans in a move that pits the carmaker against Rivian Automotive Inc. in supplying EVs for the world’s largest e-commerce company.
The maker of Jeep, Chrysler and Fiat brands will work on digital technology with Amazon and use its cloud services, according to a joint statement Wednesday. The online retailer will also be the first commercial customer for the new Ram ProMaster electric delivery vehicle due in 2023.
While the companies didn’t detail the size of the order, Stellantis Chief Executive Officer Carlos Tavares said it will sell “a big number” of the vans to Amazon. The automaker aims to be the world’s largest seller of light commercial vehicles.
“This is the acceleration and growth of an existing business,” he said at the CES consumer tech show in Las Vegas. “We are going to work intimately with Amazon about having an even more precise understanding of the customer needs of the last-mile delivery suppliers.”
The announcement comes after Stellantis last month outlined plans to generate about 20 billion euros ($23 billion) in extra revenue from software-driven features in its vehicles by the end of the decade. The agreement with Amazon adds another partner to a roster that already includes Foxconn Technology Group, Waymo and BMW AG to build three new tech platforms by 2024.
Amazon Web Services is by far the leader in the business of providing rented computing infrastructure and serves companies in virtually every industry. AWS chief Adam Selipsky recently unveiled plans to tailor more products to specific sectors such as the health care, automotive and telecommunications industries.
Reducing Costs
Amazon has been “very helpful” in driving down the cost of developing software, Stellantis Chief Technology Officer Ned Curic said during the presentation in Las Vegas. Stellantis’s Jeep models already feature cloud-based Alexa voice services, and the upscale Jeep Wagoneer, which went on sale this year, offers Amazon Fire TV.
“The pricing structure for the services that we use is not going up, it’s actually coming down,” he said.
Stellantis’s U.S. shares rose as much as 3.7% Wednesday in New York. Rivian, which counts Amazon as a major investor and customer, fell as much as 9.2%.
Amazon already has an order for 100,000 of Rivian’s electric vehicles, with the first 10,000 units due by the end of this year and the rest by the end of the decade. As part of the deal, the world’s biggest logistics company isn’t bound to buy any of the EV vans and can work with any other automotive partners it chooses.
“Amazon’s scale is globally unprecedented, and we expect them to purchase vehicles from many providers,” Rivian said Wednesday in a statement. “Our own partnership with them is intact, thriving and growing.”
Infotainment Focus
Along with the van deal, Stellantis and Amazon said they will work on software solutions for the digital cabin platform called STLA SmartCockpit starting in 2024. The technology will focus on infotainment and be added to EVs equipped with autonomous features as the industry shifts away from conventional motors.
Stellantis’s focus on revenue from software downloads and updates for services like navigation systems and maintenance shows how computer code is fast becoming the next battleground. The Amsterdam-based manufacturer has said it’s aiming for “tech industry margins” from selling software.
Read more: Stellantis joins battle with Silicon Valley for software talent
Overall, Stellantis plans to spend 30 billion euros by mid-decade on electrification and software. It will unveil its strategic plan through 2030 on March 1.
(Updates with comments from Stellantis CEO in third paragraph, Rivian comment in 11th paragraph)
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