Hyundai Motor Company and Kia Motors Corporation announce today a €100M investment in UK based electric vehicle company Arrival.
The investment marks the start of a strategic partnership between the automakers to jointly accelerate the adoption of commercial electric vehicles globally. Hyundai and Kia will use key Arrival technologies to help achieve their recently announced goal to develop mobility services and electrify their vehicle fleets.
Arrival is reimagining vehicle design and assembly to create Generation 2 Electric Vehicles. Generation 1 electric vehicles are existing fossil fuel vehicles retrofitted with electric power trains, making them expensive, inefficient and costly to run and maintain. In contrast, Arrival’s Generation 2 products have been designed from a blank sheet and surpass traditional vehicles in cost, design and efficiency.
Generation 2 vehicles are assembled using small footprint microfactories, located in areas of demand and profitable at thousands of units. Headquartered in London with over 800 employees in 5 countries Arrival is vertically integrated, and has created in-house software, components, sustainable materials and modular skateboard platforms.
Through the course of the partnership, Arrival, Hyundai and Kia will use Arrival’s flexible skateboard platforms and technologies to create new purpose built electric vehicles (PBVs) across multiple vehicle categories. Hyundai and Kia will leverage Arrival’s novel microfactories and software innovation whilst Arrival will benefit from the OEM’s global footprint and economies of scale. This will help accelerate the ‘Two Track’ strategy adopted by Hyundai, to bring zero-emissions battery and fuel cell technologies to the commercial vehicle market.
“Arrival has created a game changing product category – Generation 2 Electric Vehicles. Hyundai and KIA make world-class vehicles with uncompromising quality. This strategic partnership will empower our companies to scale Generation 2 Electric Vehicles globally” CEO of Arrival, Denis Sverdlov said.
Albert Biermann, President and Head of Research and Development Division at Hyundai Motor Group, added: “The eco-friendly vehicle market in Europe is expected to grow rapidly due to reinforcement of environmental regulations. Through the joint development of commercial electric vehicles with Arrival, we will be able to gain a competitive advantage and progressively establish our leadership in the global eco-friendly vehicle market.”
Arrival’s immediate focus is on the commercial vehicle market which has seen the largest increase in usage and therefore emissions as over 90% of commercial vehicles being diesel fuelled. Electric vehicles fit seamlessly within commercial fleets as they benefit from predictable routes and overnight depot charging. As a result of the clever design and assembly process, Arrival’s vehicles are priced the same, or less than, current fossil fuel vehicles. This gives fleet managers a compelling commercial and environmental reason to switch to electric and will accelerate the adoption of electric technology globally. With over 300million commercial vehicles in the world, this will have a huge impact on global emissions.
Youngcho Chi, President and Chief Innovation Officer at Hyundai Motor Group said: “This investment is part of an open innovation strategy pursued by Hyundai and Kia. We will accelerate investment and cooperation with companies with advanced technology such as Arrival, to respond to the rapidly changing eco-friendly vehicle market.”
As Arrival transitions from R&D to full scale production, Hyundai and Kia offer Arrival their combined expertise in mass manufacturing and vehicle launches, underpinning Arrival’s ambition of scaling rapidly around the world. Together the partnership represents a winning combination to enable the imminent delivery of the next generation of scalable, purpose built electric mobility solutions.
“We are excited to come out of stealth mode with our partnership with Hyundai Motor Group, and our complementary expertise will allow us to rapidly design, build and roll out vehicles together. Accelerating electric vehicle adoption is good for everyone – for people, business and the planet and we are pleased to undertake this mission with our partners Hyundai and Kia,” said Avinash Rugoobur, Chief Strategy Officer, Arrival.
J.P. Morgan acted as exclusive financial advisor and placement agent in connection with the Class A funding round.