Hyundai Motor Group has invested €100 million ($111 million) in London-based electric vehicle company Arrival in a partnership centered around commercial EVs.
The investment comes from Hyundai Group’s two largest brands, Hyundai and Kia, which will use Arrival’s technology to develop e-mobility services and electrify their vehicle fleets.
The South Korean automotive giant recently announced a large expansion of its electric vehicle offerings, including plans to have 23 battery electric vehicles in its fleet by 2025.
It plans to produce its vehicles in ‘small footprint microfactories’ located where demand is high and resulting in lower costs while also producing its own components.
Arrival’s focus on the commercial vehicle market lies in the opportunities to improve emissions, as over 90 percent of commercial vehicles currently use diesel fuel, and the convenience factor of predictable routes and overnight charging at depots.
It also prices its vehicles the same or less than current internal combustion engine-powered options, giving a financial incentive for the switch to EVs.
Hyundai and Kia will use Arrival’s platforms to create a range of new EVs, benefitting from its small factories, according to the company.
“The eco-friendly vehicle market in Europe is expected to grow rapidly due to reinforcement of environmental regulations,” said Albert Biermann, Hyundai Motor Group’s president and head of R&D.
“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 is based in London but has offices in Germany, the Netherlands, Russia, Israel and the U.S.
“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,” said Avinash Rugoobur, Arrival’s chief strategy officer.
“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.”
The investment is another example of large automotive manufacturers partnering with start-ups, following Ford’s investment in Rivian.
Both Rivian and Arrival will base their commercial vehicles on a ‘skateboard’ platform.
Prototypes of Arrival’s vans are expected to hit the roads this year and are set to be trialled by delivery giant DHL, British postal service Royal Mail and department store John Lewis.
Arrival is understood to be valued at over $3 billion after Thursday’s investment, which is one of the largest in the British automotive industry since the Brexit referendum in 2016 and makes Arrival one of the country’s most valuable start-ups.