How Amazon became the largest private EV charging operator in the US

“What was different here was this was a new type of electric use,” said Schefter, of the EEI. “That’s a really big power requirement in a parking lot.” That need could be met relatively quickly if the transmission lines in the area have spare capacity. In areas of the grid that don’t, upgrades can take years.

Amazon also learned how to be flexible and how to wait. The company prefers cookie-cutter processes that can be run like a production line. That breaks down in the physical world, where Amazon’s hundreds of last-mile delivery warehouses come in different designs or parking lot layouts, subject to differing local utility protocols.

“It was a bit of a surprise, how long we would need to prepare for the lead time for infrastructure,” said Chris Atkins, who leads Amazon’s logistics sustainability teams.

In 2020, Amazon met with some of the country’s large utilities, who probed the company on how much power it would need and where. Representatives of Commonwealth Edison, Illinois’s largest power provider, were there. The utility, which was struggling to secure some types of new equipment during the pandemic, opted to repurpose old transformers for Amazon. “We were doing some pretty creative stuff internally to make sure that we had what they needed and that we could meet the timelines that they wanted,” said Diana Sharpe, who deals with large customers at the Exelon Corp.-owned company.

By the time Rivian began rolling out large quantities of vans during the spring of 2022, ComEd had routed additional power to an Amazon warehouse in Chicago’s Pullman neighborhood. Rivian’s CEO stopped by that July for a ribbon cutting to announce the vans were hitting the road. Today, ComEd powers about 1,100 chargers at four Amazon warehouses in greater Chicago.

Another lesson Amazon learned is one the company isn’t keen to talk about: going green can be expensive, at least initially. Based on the type of chargers Amazon deploys – almost entirely mid-tier chargers called Level 2 in the industry – the hardware likely cost between $50 million and $90 million, according to Bloomberg estimates based on cost estimates supplied by the National Renewable Energy Laboratory. Factoring in costs beyond the plugs and related hardware — like digging through a parking lot to lay wires or set up electrical panels and cabinets – could double that sum. Amazon declined to comment on how much it spent on its EV charging push.

In addition to the expense of the chargers, electric vehicle fleet operators are typically on the hook for utility upgrades. When companies request the sort of increases to electrical capacity that Amazon has – the Maple Valley warehouse has three megawatts of power for its chargers – they tend to pay for them, making the utility whole for work done on behalf of a single customer. Amazon says it pays upgrade costs as determined by utilities, but that in some locations the upgrades fit within the standard service power companies will handle out of their own pocket.

When Amazon made the Rivian order, people who worked on the program expected that running an electric delivery fleet would eventually be cheaper than the company’s conventionally fueled fleet, a hodgepodge of bulk-ordered gasoline and diesel vehicles built by the likes of Ford Motor Co., Mercedes-Benz Group AG, and Stellantis NV. It’s unclear if Amazon is there yet, though Chempananical said Amazon was happy with the price tag of the Rivian vehicles. “All of those costs continue to scale down,” he said. “As usage grows, there's more demand, there's more supply, it gets more efficient and continues to drive to a better spot.”

Amazon also had to figure out the logistics of charger sharing. That’s not an issue at the Maple Valley warehouse, where 77 electric vans have their pick from among a fleet of 307 level 2 chargers. But other sites have fewer chargers than available vans. Fully charging a van can take several hours, and at first, that created some headaches. Amazon initially required the subcontractors who manage van fleets and drivers to keep their own staff working overnight to rotate vans among available chargers. Last fall Amazon brought that work in house, freeing subcontracted workers to drive, rather than babysit chargers. “They need the drivers, at the end of the day,” Chempananical said.

Amazon’s contract drivers say they love the vans, which were built for the company’s sometimes punishing, package-every-90-seconds routes and frequent stops. The people who employ the drivers – Amazon’s Delivery Service Partners – have some complaints. Two West Coast delivery service providers, who asked for anonymity to protect their relationship with Amazon, said body work can cost two or three times as much as conventional vehicles, because few body shops are authorized to work on Rivian vans. Spare parts can be hard to come by.

Trucking presents a bigger challenge, for Amazon and the industry. Automakers are much farther along in electrifying cars and light-duty trucks than the tractors that haul shipping containers from ports and between warehouses (see Tesla’s semi truck, which is still in pilot production years after being unveiled). Bug-eyed Rivian electric vans are a common sight crisscrossing major cities like Seattle, Los Angeles, New York and their suburbs. But the communities that host the massive warehouses further up the supply chain, often poorer precincts in places like northeast Pennsylvania or California’s Inland Empire, have yet to see the same benefits of electrification. In the company’s post-pandemic cost cutting drives, Amazon has delayed and shelved some trucking-related and other so-called “middle mile” sustainability investments, according to a person familiar with the matter.

Atkins rejected the critique, rattling off moves Amazon has made in the arena: buying trucks that run on compressed natural gas, and investing in makers of green hydrogen, among other fuel sources. “It's important that we get it right and not just scale with the wrong partners,” he said.

“It will get there,” Chempananical said of Amazon’s investments in the “middle mile.” “It’s just a matter of when and how we get there.”

Back at the Maple Valley warehouse, Justin Shearer, who runs Pacific Delivery and Logistics, an Amazon delivery service provider, gives a tour of his corner of the facility. Like many of Amazon’s small army of delivery contractors, he holds another job. Shearer is a commercial fisherman, and earlier in his career he sold mining and logging equipment. He doesn’t consider himself an environmentalist. But the benefits of keeping oil products off the road are obvious, he said.

“Putting this infrastructure in is expensive,” he said. “It's not been done at this scale, but you're not going to get better at it unless you start somewhere.”