Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money

66% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • Updates
  • disruptive innovation
  • electric vehicles
  • robotics

Amazon’s share price gets boosted by ABB tie-up to manage EV fleets

Amazon [AMZN] is set to accelerate the electrification of transportation fleets following a partnership with ABB [ABB]. News of the tie-up on 29 March sent Amazon’s share price up 0.8%, while ABB’s dipped 1.3%.

Looking at both stock’s performances throughout the first quarter of 2021, Swedish-Swiss automation multinational ABB has outpaced not only Amazon but the broader US market.

ABB’s share price climbed 12.1% during the three months to 31 March, outperforming the S&P 500’s 5.8% climb and Amazon’s 5% fall in the same period.

12.1%

ABB's share price rise in three months to 31 March

  

According to ETF.com, 3.1 million ABB shares are held across 11 ETFs in the US, while 284 funds hold 25 million Amazon shares. The Global X Robotics & Artificial Intelligence ETF [BOTZ], which had ABB as a top holding with a 7.96% weighting as of 31 March, fell 0.03% in the first quarter of 2021.

Meanwhile, the Invesco QQQ Trust [QQQ], which had Amazon as a top consumer discretionary holding with an 8.34% weighting as of 31 March, was up 1.8% in the same period.

 

Accelerating EV adoption

The partnership will see Amazon Web Services (AWS) utilise ABB’s energy management, charging technology and emobility solutions to develop a cloud-based platform for the fleet management of electric vehicles (EVs).

The single-view platform will offer real-time data analysis to help global operators maintain complete business continuity as they manage the transition to fully electric transport fleets. 

With the platform expected to launch in the second half of 2021, the companies are looking to position themselves as the industry’s go-to charging management platform.

The announcement’s timing coincided with a slew of automotive companies pledging to help electrify commercial delivery fleets thanks to forthcoming models such as Volkswagen’s [VOW.DE] ID Buzz Cargo van and Ford’s [F] all-electric Transit Custom.

Workhorse [WKHS], which specialises in electric delivery trucks, had orders for 8,000 EVs at the end of 2020 from customers such as FedEx [FDX] and United Parcel Service [UPS]. Deutsche Post DHL [DPW.DE] also plans to roll out 400 EVs to its UK-wide fleet by 2025, using the Renault [RNO.PA] Master ZE van and Volvo [VOLV] FL Electric 4x2 rigid truck.

Amazon’s own custom electric delivery vehicles, made in collaboration with Rivian as part of The Climate Pledge – Amazon’s commitment to becoming net-zero carbon by 2040 – began hitting the road in early February. The company plans to have 10,000 on the road by 2022 and 100,000 by 2030.

2040

When Amazon has committed to being net-zero carbon

  

Frank Muehlon, head of ABB’s global emobility division, expects the platform to revolutionise the world of electric mobility by “integrating EV hardware and software into one ecosystem to provide a seamless user experience”. 

The ABB and AWS solution could be vital in accelerating the transition to EVs among fleet operators.

 

Powering a cleaner future

Almost a quarter (23%) of global energy-related greenhouse gases are caused by the transportation sector and ABB believes that EVs can substantially limit the CO2 emissions contributing to climate change.

BloombergNEF’s Electric Vehicle Outlook forecasts the current 8.5 million global EV fleet to grow to 116 million by 2030. Considering that most fleet operators use limited third-party charging management software, Amazon and ABB could significantly benefit from their position as the software solution for charging hardware.

“As industries forge ahead with [the] electrification of their vehicle fleets, customers need reliable and intuitive services to help them adapt to the new operating model and optimise how they utilise their fleets,” said Jon Allen, director of professional services and automotive at AWS.

“As industries forge ahead with [the] electrification of their vehicle fleets, customers need reliable and intuitive services to help them adapt to the new operating model and optimise how they utilise their fleets” - Jon Allen

 

Amazon’s shares had a consensus strong buy rating among 31 analysts polled by TipRanks, with an average price target of $4,106.83, representing a 32.7% climb from Amazon’s share price close on 31 March.

ABB was rated a hold based on nine analysts’ ratings. The stock had an average price target of $28.33, which would see a 7% fall from ABB’s share price at close on 31 March.

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

Continue reading for FREE

  • Includes free newsletter updates, unsubscribe anytime. Privacy policy

Free ebook

Tricks of the trade: 7 interviews with the world’s top traders

Get it now

Related articles