Amazon's EV Investment: Scope And Critical Analysis Essay.

Types of Electric Vehicles and their Advantages

Electric vehicle, shortened as EV, is an automobile that operates on electricity. EVs are vehicles that are power-driven entirely or partly by power. Electric vehicles have nominal operating costs as they have lesser stirring parts to sustain also; they are actual eco-friendly as they procure tiny or no fossil fuels. While few EVs use lead acid or nickel metal hydride batteries, lithium-ion batteries are presently the usual for modern battery electric vehicles as they have an extended lifetime and are well at recollecting energy with a self-discharge rate of only five percent per month. Notwithstanding their augmented efficiency, these batteries still have issues, as they are susceptible to thermal run away. It can charge as tiny as £7.80 to completely charge an electronic car from household and also be permitted in public car grounds (Ramagopal 2009). Two main kinds of electric vehicles (EV) are fully electric and plug-in hybrids. Battery-powered electric vehicles (BEVs) are ninety nine percent fewer moving portions than core combustion engines which require little care. The scope of EVs can be understood by its advantages as follows: There is comparatively little sound produced; no exhaust, no trigger plugs, no clutch also no gears. As a replacement of burning fossil fuels, it operates on rechargeable batteries. BEVs can be charged overnight at household, gives ample range for utmost trips. Longer journeys or travel with many hill climbs may need charging the fuel cells beforehand reaching the destination. The charging period for an electric vehicle vary from thirty minutes to twelve hours. It is dependent on the charging station's rapidity and the battery's size. In the present time, range is the utmost pressing challenges for electric vehicles, but it is something that the industry is working to achieve. As per internet surveys, electronic cars will become a boom by 2030. The paper shall cover the scope of EVs, the background of Amazon, the investment made by Amazon in EVs and the critical analysis of the investment decision. EV is the future of the world (Smith 2010).

Bezos' "regret minimization framework" defined his hard work to evade any doubts for not appealing preferably in the cyber space corporate evolution at the time, impelled the company's establishment in 1994. Amazon.com, Inc. is a corporation that bids online trade purchasing (Agarwal 2009). It delivers to four different customer sets: consumers, content providers, businesses and sellers. Further advertising and promotional facilities presented by the corporation include web marketing, co-branded credit card agreements. Its retail sites furnish to customers with stress on choice, pricing and accessibility. It generates websites to permit the corporation and 3rd parties to trade items across tons of produce classes. As part of its $2 billion Climate Pledge Fund, Amazon announced that it will invest in three new start-ups (Bastiège 2019). Amazon announced the Climate Pledge Fund in June to invest in solutions being developed to combat climate change and global warming. Amazon has so far invested in 11 companies spanning a variety of industries, from manufacturing to energy generation to agriculture and food. Austin-based start-up, named Resilient Power, is creating electric vehicle charging equipment that has a smaller footprint and is easier to install than comparable systems, is one of the new grantees (Smith 2010).

Background of Amazon and its E-commerce Model

The start-up will help Amazon achieve its own target of deploying 100,000 electrified delivery cars by 2030, according to Amazon. Rivian Automotive has been hired by Amazon to build the electric automobiles. Producers have been hard-pressed to source electric vehicles around the world owing to factors like rising claim for low-emission commutes, governments reassuring long-range, zero-emit vehicles with subsidies and duty refunds (Garcia 2019). Therefore, there is a growing demand for electronic automobiles. Nations, throughout the world have reputable emission drop objectives built on their respective abilities. Increased government investments in the growth of EV charging stations, hydrogen fuelling stations, and buyer incentives shall give probabilities to rise their revenue stream and area footprint (Guy 2009).Electric car adoption is not only posing issues for incumbent manufacturers, but it is also opening up opportunities for new players to enter the industry. These shifts in the automobile industry necessitate the development of new parts and materials, not just for the next generation of batteries, but for the entire car manufacturing process. The object behind selecting Amazon and EVs investment is, the future is all about electronic vehicles (Turner 2011). Also, there is a need to aware people of the usage of electric cars, its importance and how we are affecting the environment by our old means.

Electric vehicles are a crucial option in an age when more sustainable options are required. They favour reducing greenhouse gas emissions and fossil fuel dependency, hence reducing influence of ozone-depleting compounds and promoting extensive renewable deployment (Daraban 2010). Notwithstanding the fact that a significant amount of research is being conducted globally on the many properties and features of electric vehicles and also the nature of their charging set-up, electric vehicle production and network modelling endure to grow(Johnson and Turner 2010).

According to the document, e-commerce behemoth possessed equity funds with Rivian preferred stock, which constituted around a twenty percent ownership stake. As of 2020, holding had a "carrying value" of $3.8 billion. The information, which was discovered in a regulatory filing, sheds new light on how intimately Rivian's destiny is linked to Amazon. According to Rivian's initial public offering, Amazon has invested $1.345 billion in the electric vehicle manufacturer. Amazon also recently bought $490 million in Rivian convertible notes, which will change to Class A shares next the IPO if particular pricing restrictions are met. Amazon is a customer as well as an investor in Rivian. Rivian and Amazon signed an agreement in September 2019 to construct one lac electric delivery trucks. Rivian announced recently that it anticipates delivering at least ten vehicles in December 2021. By 2025, all of the vehicles (the remaining of ninety-nine thousand nine hundred ninety) will have been delivered. Rivian's IPO filing made it apparent that Amazon IS an important component of the company's universe. For example, Amazon is mentioned 81 times in the Rivian filing, which is a large number given Amazon's two-fold status as stakeholder and a customer. Also, it appeared like Amazon owned not less than five percent of Rivian, while the exact percentage was unknown.

Investment made by Amazon in Electric Vehicles

In a Battery swapping, an exhausted EV battery is detached from the automobile and swapped with a wholly charged one, is an alternative battery recharging method that is fast traction everywhere in the world (Zand et al 2020). Stakeholders must contemplate potential charging claim, also property and power source restrictions when making EV charging set-up. The primary stage in the preparation procedure is to regulate the EV charging request; it is designed using the present or estimate number of electrical vehicles on the street (Torelli 2017). Moreover, EV charging set-up shall be accessible to encounter EV adoption goals. Therefore, regulatory agencies may begin goals for EV charging structure as well.

Plug-in Hybrid Electric Vehicles (PHEV) is combination of battery-operated and petrol (or diesel) relatively than trusting on plug-in engine. This style improved for distance driving as one can shift to fuels rather finding charging stations. Moreover, the disadvantages of PHEVs are same as those of combustion vehicles like requirement of maintenance, engine noise, pollutants, and the charge of gasoline. Also, PHEVs has lesser battery containers, ensuing in a lower range (Li et al 2019).

Several policies for electric vehicles (EVs) implemented in crucial markets over the last decade, resulting in a significant expansion of electric car models (Horcher 2005). Furthermore, specific policy aid and model development for the average- and heavy-duty vehicle segments will be serious to lowering emits and attaining climate goals. Substantial tax disruptions assisted the primary adoption of electric light-duty vehicles (LDVs) also improved the development of the EV trade and battery productions. Policies, which comprised buying subsidies, car purchase and registering levy rebates, were planned to close the charge gap among electronic vehicles and conservative automobiles. The role of electric vehicles in meeting fuel economy and CO2 emissions limits has grown as the rules have become more stringent (Vernimmen et al 2014).

• User Interface
• Smart Charging Solutions
• Connectivity
• Design
• Price Quality Ratio

• Return on Investment: This factor analyse the rate of return that is being earned from various investments. Amazon has found remarkable return from this investment as per future sales.
• Inflation: Any venture has to beat the inflation to be effective. The EV business shall balance the inflation with its supply.
• Liquidity: The need to have currency in hand for either an emergency or even a sudden variation. Amazon has ample of funds from different investments. The sector maybe new but funds are not an issue. 
• Tax Benefits: Tax can rub away the return on investment if it is not done sensibly. A feasible study of tax calculation has been done before investing in EVs.
• Risk: Risk is the approximation of the degree of the trend of the loss. It is a computable element. The risks are high but they are calculated one. Entering new markets have always been a risky investment.
• Safety: The particular kind of monetary asset should be presented under a governing framework. The safety is as per expectation for the particular investment.
• Return: It should be received by way of interest and surplus. The return are high as the competitors are very few.
• Timeline of Investment: It is the life of a financial instrument. The future is of EVs, so the lifeline of such investment is large.

The nature of internet delivery services - a fast-paced trip from the central hub where no standard charging solution can be installed - is well suited to EV acquisition, which overcomes a range of concerns and a lack of charging infrastructure that has proved a roadblock to common adoption. . Electric cars cost less than 1% of annual Indian cars sold compared to about 6% in China. Cheap operating costs, as well as the opportunity to burn their raw credentials in dirty and noisy cities, also make EVs an attractive option. "It makes sense for the economy," said Amazon’s Singh. Although pre-EV costs may be high, “monthly operating costs are low as your maintenance costs are low. The force begins to change as the scale enters. ” At times, cars became exhausted and had to be towed to a warehouse, and low-slung batteries were often immersed in water-filled pits during heavy rains. Amazon has worked with car manufacturers to produce non-flammable and non-abrasive batteries that are strong and durable in harsh environments and vehicles are now equipped with devices that track the amount of money remaining. Funding and lack of benefits also hamper electricity supply to delivery companies. In the event of a credit crunch, there is uncertainty about new technologies and resale value of EVs, so banks are reluctant to lend, and in doing so they charge higher interest rates. Our future is electric cars. All e-commerce companies, large and small, should use EVs because they are economical and environmentally friendly. Operating capacity is very low compared to diesel and petrol vehicles, which is why they are cheaper for us. The National EV Charging Initiative brings together car manufacturers, power suppliers, electric vehicles and charging industry leaders, workers, and community interest groups to show they are ready, willing and able to support government action in the national network of light, medium and heavy - work vehicles. Major problems include fire hazards, and that EVs are not safe. There is the issue of high-tech witchcraft, charging interactions, car costs, and financing of charging stations, just to name a few.  However, EVs are not 100% clean unless fully powered by renewable energy resources. Today, very few EVs are powered by renewable energy and even fewer are 100% renewable energy. In some cases, electric cars last longer than gas cars. It all depends on how you define the sentence. An electric car will live for many years and needs minor repairs. However, the electric car will move on to a single filling and it is easy to change parts over time.

Challenges Faced by the Electric Vehicle Industry

The scrutiny done to inspect the profitability of an asset over the lifecycle of an asset and also alarms of affordability and planned fit, called as investment evaluation. The cash flow statement describes a project's ability to raise its own funds and determines if it is financially viable. The approaches of Investment Appraisal named; accounting rate of return, internal rate of return (IRR), Payback and discounted cash flow methods of net present value (NPV) are all used in investment appraisal. Indicators like the financial internal rate of return (FRR), or discount rate gives a zero net present value of the cash flow of the project's period. Following that, the FRR is linked to the wholesome cost of funding rate. If FRR goes below, the plan as stated is no longer economically viable, necessitating a reform or fresh sources of finance, like fundings and grants. The discounted payback is commonly used as a preliminary technique of evaluation since it indicates the whole time needed to return the original investment in a straightforward and direct manner. To calculate the discounted payback, three main points must be considered as mentioned: Initial investment; Cash flows obtained with the project, and Discount rate to future cash flows (James et al 2012). The company’s investment decision is good enough as the future market can be perceived.

The project's Net Present Value (NPV), is derived by means of the cost of funding as discount rate, is an often-used alternative indicator. If NPV is encouraging, plan is financially viable. FRR and NPV measure different components of a project's return, yet they both arrive at the same conclusions about viability (Thanopoulos 2014). If the Amazon.com Bezos investment project has a higher NPV value than Zero then the finance managers at Amazon.com can apply for the project, otherwise they may reject the project. This means that the project will bring higher returns over a period of time than any other investment strategy. Amazon uses NPV method as investment appraisal method. Choosing a project is often a much more complicated decision than choosing just based on the NPV number. Finance managers at Amazon.com should conduct a sensitivity analysis to better understand not only the current risks of projects but also how those risks can be incorporated or mitigated during project implementation.

Today, the demand is not much high, but the future belongs to electronic vehicles. In only two years, further five hundred different electric vehicle (EV) models will be available worldwide, providing consumers with an unparalleled level of choice. Furthermore, the percentage of electric vehicles sold is rapidly increasing, particularly in Europe. Experts forecast that by 2040, they will control 58 percent of the market. The lowering price of batteries and more variety charging facilities are likely the utmost exciting game modifiers in terms of EV accessibility (Oner 2010).

Conclusion

Without the Covid-19 epidemic, electric vehicles were on track to have a record-breaking year in sales. Then, purportedly, gasoline prices cut down to their bottom level in more than a span, putting an end to the EV revolution. However, their ability to mitigate the worst impacts of climate change remains unaffected. Passenger automobiles are big polluters, accounting for about sixty percent of whole C02 releases from European road travel. While the pandemic uncertainty makes all predictions difficult, none of the fundamental drivers driving the EV market forward have changed: batteries continue to improve and become more affordable, governments are forcing for more decarbonisation hard work, and city air value is a rising concern round the world."

Sustainability and Environmental Benefits of Electric Vehicles

Electric vehicles (EVs) provide a significant new financial opportunity with substantial risks. To succeed, one will need a well-defined EV investment strategy. There are several challenges faced by EV companies such as: shortage of charging stations, the electricity demand is increased due to increasing load, public charging infrastructure and then there are some safety risks also. The recommendations for EVs are: The government's primary focus should be on obtaining electricity that is derived from a clean and sustainable source. When developing strategies, keep in mind the local conditions and requirements. Also, Charger installation, rebates, standards to make new projects EV-compliant, and utilities to supply charging infrastructure are all new efforts and actions that should be promoted. Governments should invest in technological advancements and encourage citizens to adopt technology by emphasising the benefits. They should facilitate a smooth transition, and solutions such as EV charging tax incentives can be used. Further, to address the safety risk, adequate modelling of the required power supply and execution of safety precautions, such as providing isolation between both sides of the circuit, preventing contact with live elements, and so on, should be considered. Moreover, it’s nearly an unavoidable conclusion that EVs will swap ICE vehicles in the succeeding decade and this offers thrilling investment opportunities. Charging station firms, battery manufacturers, and battery materials companies are all good places to invest in electric vehicles. 

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