Amazon is seeking solutions to address challenges posed by the Middle East's extreme heat on electric vehicles, as it accelerates its plans to use them for its UAE delivery fleet, a senior regional executive has said.
The world's largest online marketplace, which in 2022 committed to use 100,000 EVs for its last-mile deliveries globally by 2030, is “closely” coordinating with UAE authorities, as well as its other partners, Prashant Saran, director of operations at Amazon Turkey, Middle East and Africa, told The National.
“In this region, because of the extreme heat, there is not yet a scalable, fully-proven commercial electric vehicle model. Right now that is a challenge because of the temperature and the batteries,” Mr Saran said ahead of the fifth Amazon Prime Day in the UAE on July 16.
“But we see that as an opportunity. So, we are closely partnering with the government, with small and medium enterprises and original equipment manufacturers, as well as our delivery partners.”
Amazon convened them in a workshop late last year to look at “some of the challenges in this area and what can be done from a technology and policy perspective to be able to scale that up”, he said.
A timeline for the launch of the EV delivery fleet has yet to be determined, but the initiative is a “work in progress” that Amazon is “constantly piloting and testing”, Mr Saran said.
“We are already working with delivery service partners who are using electric scooters to deliver in some of the dense areas … we are extremely committed to this and the share of electric vehicles for us will keep on increasing over a bit of time,” he said.
An all-EV fleet will be able to help Amazon achieve its plans to achieve net-zero operations by 2040, as the world moves towards more sustainable forms of transport.
The Seattle-based company also cofounded The Climate Pledge in 2019, which is a commitment for organisations to become net-zero carbon by 2040 – a decade ahead of the Paris Agreement’s goal in 2050.
Amazon began using electric delivery vehicles from fellow US company Rivian in 2022. Currently, it has about 13,500 EVs operating on US roads and more than 1,300 in Europe.
In addition to the 100,000 Rivian vans it has pledged, Amazon has used more than 15 EV models of electric vehicles on the road, including delivery vehicles, e-cargo bikes and e-rickshaws, to “test and learn” across the US, the EU and India.
An EV fleet would help operational efficiency in the UAE – which has ramped up efforts to promote and put more EVs on its roads – and the Middle East, where Amazon has made significant investments: it has two major logistics hubs in Abu Dhabi and Dubai, and has boosted its capacity in the Emirates and Saudi Arabia by 70 per cent and 100 per cent, respectively.
“We are here for the long term and we are here to keep on raising the bar … for investments in infrastructure,” Mr Saran said.
Meanwhile, Amazon's fifth Prime Day in the UAE is expected to build on last year's, as more consumers lean towards more budget-friendly deals that influence their purchase decisions, said Stefano Martinelli, vice president of Amazon in the UAE and Saudi Arabia.
Globally, the 2023 edition of Amazon's biggest shopping event was the biggest ever in its history, with 375 million items sold and $2.5 billion saved by Prime customers, he said.
Amazon data shows that the number of UAE consumers shopping online each week has doubled, “giving us the confidence that there is a healthy growth in e-commerce”, Mr Martinelli told The National.
“Selection, pricing and convenience are still the three pillars that every customer wants over time.”
The UAE's e-commerce market is expected to reach $9.2 billion in 2026, up nearly 92 per cent from 2021, the Dubai Chamber of Commerce said in 2022.
The study, based on data from Euromonitor, also projected that the share of e-commerce in total retail sales will reach 12.6 per cent by 2026.
Growth momentum within the UAE’s e-commerce sector is being supported by rising demand for online shopping and steady investment flows in the sector’s infrastructure, the study said.
