It was announced today that Hyundai and Kia would make a sizable investment of €100 million into UK-based electric van startup, Arrival, and will hope to have some cooperation on future Hyundai and Kia models in the future. This is a cost-effective base which incorporates a battery pack, electric motor and driveline components.
Arrival will use this capital in scaling up production and development of its electric van, which it wishes to stand with the reputed auto manufacturers. Demand for eco-friendly commercial vehicles is expected to rise as governments tighten environmental regulations further, the statement said.
It remains unclear when these vehicles will hit the streets, but Hyundai and Kia said they will be built in volume and based on Arrival's platform.
The announcement is a strategic partnership and one that seems particularly timely given Kia's recent pledge to introduce 11 fully electric vehicles into its range in the next five years.
"This strategic partnership will empower our companies to scale Generation 2 Electric Vehicles globally", said Arrival CEO Denis Sverdlov. Together the partnership represents a potentially winning combination to enable the imminent delivery of the next generation of scalable, objective built electric mobility solutions.
The investment in Arrival is the latest from Hyundai and Kia.
Kia also recently announced a plan at its January 14 Investor day to develop PBVs for shared-service companies and logistics companies.
Arrival's first product is an electric van that will focus on urban delivery.
These investments are seen as a way to build a leadership position in the rapidly expanding global EV market. 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.
"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". The company is conducting a number of pilot programs with a number of logistics companies in Europe, according to the announcement. That strategy is the opposite of US electric vehicle rival Tesla which uses massive "gigafactories". In September 2019, Hyundai and Kia also invested in IONITY, Europe's largest high-power electric vehicle charging network, and set the stage for sales expansion of EVs within Europe.