The use of electric vehicles to deliver shipments is major part of Amazon’s AMZN efforts to become a net-zero emitter of carbon by 2040.

The online retail giant has placed a purchase order for 1800 electric vans from Mercedes-Benz for its European delivery fleet, as part of the online retailer’s plans to run a carbon neutral business by 2040.

The order includes 600 medium-sized eVito vans and 1200 large-size eSprinter vans. These vehicles are expected to be in operation this year.

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

Other Carbon Neutrality Efforts

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

Earlier this year, Amazon placed a purchase order for 100,000 electric delivery trucks from Rivian, an automaker and automotive technology company. The electric truck startup expects to start production next year and complete the order by 2030.

Apart from this, the company placed a purchase order for 40 electric vans and 60 charging stations from Deutsche Post’s StreetScooter unit.

Also, 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 the AWS infrastructure globally.

Notably, it has launched more than 70 clean energy projects that are anticipated to produce in excess of 1,900 MW of renewable capacity.

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

Bottom Line

Per a report by Energy Information Administration, renewables will collectively produce 19% of electricity in the United States 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 for lowering overall carbon emissions and cutting energy bills substantially.

We believe Amazon’s recent deal is expected to provide it with 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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