The Wisemen said if you cannot beat them then join them. Elon Musk, the CEO of Tesla, reacts to Jeff Bezos’ outstanding move. Just like David Portnoy and Warren Buffett as rivals in the stock market, we see the same rivalry between Jeff Bezos and Elon Musk in the car’s turf. Recently, Amazon has gained Zoox at over $1 billion, and this made Elon Musk quite terrified about the move.
— Elon Musk (@elonmusk) June 26, 2020
The Zoox is an autonomous car firm whose headquarters are at Foster City. Zoox has about 890 workers after laying off some employees because of the pandemic. Zoox came into existence in 2014 after the collaboration of Tim, Jesse Levinson, and Arthur Levinson. In 2018, the firm gained approval for giving self-driving services to the people of California. By July, Zoox had raised over $750 million in the capital at a higher valuation. Last year, Zoox assigned Aicha Evans as the Chief Executive Officer.
Reasons Jeff Bezos’ Move Terrifies Tesla CEO
The self-driving tech of Zoox seems to be more advanced than Tesla’s technology. According to Guide house Insight, Tesla ranks at number 18 at has a score of over 30. Zoox is at number 9 with a score of over 65. Citi Research also appreciates Zoox’s positive move. Reports say that Amazon merged with Zoox in improving robotaxis. Elon Musk says Tesla’s tech will be at its peak after it realizes its full autonomy.
ARK Invest predicts that Tesla’s stock prices will rise over $20000 when the technology realizes or reaches level 5. Currently, the stocks are trading at a lower price.
Another reason is that Amazon has enough resources to sustain the project of autonomous cars. It has over $40 billion cash on hand whereas Tesla has a cash pile of over $6billion only. Therefore, Zoox can achieve its vision and dream without obstacles or difficulties. After the coronavirus pandemic hit the world, most of the companies have been doing poorly as their employees experience massive layoffs. In the case of Amazon, it has ripped off benefits from the stay at home and order putting the firm in a position whereby its cash pile is increasing.
— caribb🇨🇦 (@caribb) April 30, 2020
On the other hand, Tesla is facing risks due to the global economic drop. It is not until when the economy improves that the firm will have chances of improvements. This disadvantage of dependency on the economy is one of the reasons why Amazon is winning more than Tesla. Tesla should be ready to use a lot of money during this period to help it sustain itself.
Amazon Eases Into Self-Driving Tech By Joining Aurora's $530 Million Funding Surge: https://t.co/ih5Y8eB5IF
— Forbes Tech (@ForbesTech) February 10, 2019
Thirdly, Jeff Bezos’s strategy improves Amazon’s chances of being more successful. Tesla’s success concerning self-drive vehicles tech depends totally on itself. The most amazing thing is that Amazon, Zoox’s backer, did not change the leadership of Zoox. In 2019, Amazon betted on Aurora Innovation that is also an autonomous car organization. Besides, it also betted on Rivian. This wise strategy of spreading risks across the autonomous car firms puts Amazon in a better position compared to Tesla whom they are risking all in a single basket.