Key Points in This Article:
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Carvana‘s (CVNA) stock has surged 7,300% over the past two years, a remarkable turnaround story that defied the experts.
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Pundits have doubted Carvana’s survival before, but cost-cutting and strong financial results fueled its comeback.
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Amazon’s (AMZN) entry into the used-car market through Amazon Autos raises questions about CVNA’s future stability.
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Outrunning the Market
Carvana (NASDAQ:CVNA) has staged one of the most remarkable turnarounds in recent market history, soaring an astonishing 8,200% in just two-and-a-half years.
On January 6, 2023, CVNA hit an intraday low of $4.23 per share, teetering on the edge of bankruptcy amid a brutal economic downturn and operational missteps. Today, the stock trades at $350.74 per share, fueled by a rebound in used-car demand, cost-cutting measures, and record-breaking second-quarter results with $4.84 billion in revenue and GAAP operating income of $511 million — up over 100% from the year-ago period.
Pundits once wrote off Carvana (including this writer), citing its heavy debt and operational inefficiencies, yet the company defied the naysayers with a strategic overhaul, including layoffs and reduced capital expenditures.
This resurgence has made CVNA a darling of investors, but a new threat looms on the horizon, one that has the potential to wreck the used car dealer and send its stock spiraling downward.
A New 800-Pound Gorilla Enters the Used-Car Market
E-commerce titan Amazon (NASDAQ:AMZN) has expanded its Amazon Autos platform to include used and certified pre-owned (CPO) vehicles, a move that directly challenges Carvana’s online used-car empire.
Launched initially in Los Angeles, the program allows local dealers to list their used vehicles on Amazon’s platform, with Hyundai dealers as the first participants. Customers can browse, finance, and purchase vehicles entirely online, with transparent pricing and no haggling, a model that mirrors Carvana’s customer-friendly approach.
Like its e-commerce platform, Amazon Autos operates on a marketplace model. Dealers list their inventory, set their own prices, and control the customer relationship. Amazon also doesn’t take a cut of the vehicle sale, rather it generates revenue from nominal listing fees and advertising opportunities. It makes the initiative a cost-effective marketing tool for dealers.
After selecting a vehicle, buyers e-sign paperwork and pick up their car at a participating dealership, leveraging Amazon’s trusted brand and seamless user experience. While the rollout begins in Los Angeles, it plans to expand to additional states and include more automakers in the coming months.
A Burgeoning Market Opportunity
Despite those limitations, a used car portal on Amazon Autos has the potential to significantly disrupt the used-car market. Carvana, which sold 416,348 vehicles in 2024 — and 277,178 in the first six months of 2025, a 43% year-over-year increase — has captured just 1.5% of the U.S. used-car market, but relies on its streamlined online platform and logistics network to differentiate itself.
Amazon’s entry, however, brings unparalleled brand recognition and a vast customer base. Although specific financial details about Amazon Autos’ contribution are scarce — it only launched in December 2024, but has a presence in more than 130 cities — the platform’s existing partnership with Hyundai for new car sales has shown promise, with customers praising the convenience and transparency of the buying process.
Automotive News reported that Amazon Autos aims to replicate this success with used cars, potentially scaling to capture a sizable market share.
The used-car market is vast, with 39 million vehicles sold annually in the U.S., and Carvana’s CEO, Ernie Garcia III, has set an ambitious goal of reaching 3 million in annual sales within a decade.
Amazon’s entry could complicate this vision, especially as it expands beyond Los Angeles and Hyundai. However, Amazon faces challenges, including the complexities of used-car inspections and the established competition from platforms like Carvana, AutoTrader, and CarGurus (NASDAQ:CARG), which already offer vehicle history reports and detailed inspections.
Key Takeaway
Amazon Autos’ used-car program is currently a one-city, one-automaker effort, limiting its immediate impact on Carvana. However, as Amazon expands to more cities and dealers, it could pose a significant threat.
Of course, not every Amazon venture succeeds. Does anyone remember the Amazon Wallet and Fire Phone? Carvana may not crash immediately, but Amazon’s reach could make it a formidable competitor if the program gains traction. After a 8,200% run in two years, Carvana could see its gains wrecked by the entry of this new rival.
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