Analysts remain bullish on Carvana as Amazon eyes used-car sales
According to a news report on Wednesday, Amazon (AMZN) is eyeing the sale of used cars. JPMorgan calls the e-commerce giant’s imminent expansion into used car sales “not new news,” while BofA views the move as not directly competitive with Carvana (CVNA). Piper Sandler upgraded the latter to Overweight on the shares’ recent selloff.
EYEING USED-CAR SALES: Amazon is eyeing the sale of used cars as the company continues to refine its new car-shopping platform with customers and dealers in certain U.S. markets, Carly Schaffner of Automotive News reports. Publicly traded companies in the used car sales space include CarMax (KMX), AutoNation (AN), Vroom (VRM), Carvana, and Sonic Automotive (SAH).
NOT NEW NEWS: JPMorgan notes that in an AutoNews podcast earlier this week and as covered by a related article yesterday, Amazon Autos expressed its intentions to broaden the scope of its nascent online vehicle sales initiative to include used vehicle sales. The firm had previously learned of Amazon’s intentions to expand into used car listings during its meetings with their sales and business development teams at CES 2025 and NADA Expo.
JPMorgan views Amazon’s platform listings and transaction capabilities as essentially providing an alternative lead generation channel for new and used car dealers, and sees minimal risk of disintermediation of the dealer channel — AutoNation, Asbury Automotive (ABG), Group 1 Automotive (GPI), Lithia Motors (LAD), Penske Automotive (PAG), Sonic Automotive, CarMax, Carvana — given the complexities involved in franchise regulations and used car sourcing/reconditioning as well as the criticality of a robust service network. The firm also sees minimal risk to franchise dealer Finance & Insurance given it remains a significant profit driver for the stores and dealers are unlikely to list their inventory if F&I commissions are not guaranteed/compensated.
NOT DIRECTLY COMPETITIVE: BofA notes that Amazon Autos general manager Fan Jin appeared on the Automotive News Daily Drive podcast this week, providing details on Amazon’s push into the automotive sector and stating that Amazon is “getting into used cars soon here in a little bit.” Amazon Autos does not provide delivery or recondition used vehicles itself like Carvana and has shown no intention to do so, notes the firm, which also points out that its dealer partners see lower attached rates for warranties and service contracts.
