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Amazon Orders 40 Electric Vans, Focuses on Carbon Neutrality

Zacks Equity Research

Amazon AMZN has expanded its delivery fleet of distribution centers in Munich, Germany.

It placed a purchase order for 40 electric vans and 60 charging stations with Deutsche Post's StreetScooter unit.

Additionally, the retail giant ordered 200 electric vehicles from other suppliers to use in Germany this year.

The latest deal is a testament to its relentless efforts to ramp up e-commerce and strengthen retail delivery services in Germany. These emission-free vehicles will reduce carbon footprint, which will help Amazon save the environment by leveraging renewable energy.

Amazon.com, Inc. Price and Consensus


Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Carbon Neutrality Endeavors Enhanced

The latest move bodes well for the company’s goal toward being carbon neutral by 2040.

Last year, Amazon had placed a purchase order for 100,000 electric delivery trucks with Rivian, an automaker and automotive technology company. Apart from this, the company’s cloud computing platform, Amazon Web Services (AWS), is focusing on green energy.

Recently, Amazon announced three new renewable energy projects in Ireland, Sweden and the United States to power AWS infrastructure globally. In 2018, AWS stated that it has used more than 50% of renewable energy for its global infrastructure.

Notably, Amazon has launched more than70 clean energy projects that are anticipated to produce more than 1,900 MW of renewable capacity.

We believe Amazon’s commitment toward environmental, social and governance (ESG) practices to bolster investor confidence and increase loyalty.

Increasing Focus on Renewables

Per a report by Energy Information Administration (“EIA”), renewables will collectively produce 18% of U.S. electricity in 2019 and 19% in 2020.  In the past few years, the usage of renewable energy has gradually increased.

Amazon has been shifting focus from fossil fuels to clean energy for quite some time now. The shift to clean energy sources is anticipated to reduce costs in the near term, which is a major positive. Additionally, the company can generate healthy returns from increasing solar and wind investments as there are several associated tax incentives.

Apart from Amazon, tech giants like Alphabet GOOGL, Microsoft MSFT and Apple AAPL are taking initiatives to adopt alternative energy sources to lower overall carbon emissions and cut energy bills substantially.

We believe Amazon's recent deal is expected to provide it a competitive edge in this carbon neutral race.

Zacks Rank

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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