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In the News

Amazon to invest $1 billion in electric vehicles and charging hubs

Geoff Riley

10th October 2022

Investment decisions by leading businesses may well have a notable impact on the speed with which the UK transitions to low-carbon transport. This news from Amazon provides a terrific example of a business thinking long term and with the financial resources and clout to carry it out.

The Guardian reports here that Amazon is investing more than €1bn (£880m) to add thousands more electric lorries, vans and cargo bikes to its fleet of delivery vehicles across Europe over the next five years. In the UK alone, it plans to have 700 electric HGVs by 2025 and more than triple its fleet of electric vans to 10,000 across the continent.

There is a wealth of business economic here! For example, the scale of their investment implies that Amazon will be able to exploit significant purchasing economies of scale when negotiating buying contracts with electric HGV manufacturers.

Another aspect worth highlighting in the hub and spoke design of their logistics networks. This is common to many sectors including low-cost airlines.

We read that "Amazon is aiming to double the number European cities where it has so-called “micromobility hubs”, which enable deliveries via cargo bike and on foot, from more than 20 at present."

The wider investment project in new vehicles includes the installation of fast charging points capable of charging electric HGVs within two hours.

Optimisation, efficiency, scale - these are the hallmarks of the Amazon approach. It is highly effective in the long run.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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