Hyundai and Kia Make Strategic Investment in Arrival to Co-develop Electric Commercial Vehicles

Hyundai and Kia Make Strategic Investment in Arrival to Co-develop Electric Commercial Vehicles

Release Date: 16 January 2020
  • Agreement accelerates Hyundai and Kia’s clean-mobility transformation
  • €100 million investment enables co-development of eco-friendly vans and other products for logistics, on-demand ride-hailing, and shuttle service companies
  • Partnership takes advantage of Arrival’s scalable ‘skateboard’ platform technology to underpin future Purpose Built Vehicles (PBV) from Hyundai and Kia
  • Arrival has developed in-house software, materials, components and other technologies for the development of Generation 2.0 electric vehicles
  • Boosts Hyundai-Kia strategy for deployment of electrified commercial vehicles

Hyundai Motor Company and Kia Motors Corporation today announced a strategic investment of €100 million (US $110 million) in a new partnership with Arrival, a UK-based electric vehicle startup.

Through the partnership, Hyundai and Kia plan to introduce competitively priced small and medium-sized electric vans and other products for logistics, on-demand ride-hailing and shuttle service companies. Arrival’s scalable electric platform can be adapted for multiple vehicle categories and types which Arrival, Hyundai and Kia will explore for the development of a range of Purpose Built Vehicles (PBV).

The partnership with Arrival will help Hyundai and Kia meet the rapidly growing demand in Europe for eco-friendly commercial vehicles, and accelerate the brands’ transformation from car makers to clean-mobility providers.

Albert Biermann, President and Head of Research and Development Division for Hyundai Motor Group, and Denis Sverdlov, Chief Executive Officer of Arrival, signed a contract for investment and the joint development of electric vehicles at the headquarters of Hyundai and Kia in Seoul. Of the total investment, Hyundai will contribute €80 million; Kia €20 million.

“The eco-friendly vehicle market in Europe is expected to grow rapidly due to the introduction of further environmental regulations,” said Biermann. “Through the joint development of electric commercial vehicles with Arrival, we will be able to gain a competitive advantage and progressively establish our leadership in the global eco-friendly vehicle market, with Europe at the forefront.”

Arrival’s CEO Sverdlov added: “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.”

Hyundai and Kia to use Arrival’s modular, scalable ‘skateboard’ EV platform

Founded in 2015, Arrival has production plants and R&D centers in the US, Germany, Tel Aviv, Russia and the UK. The company’s strength lies in its ‘skateboard’ vehicle platform with a modular component structure, a cost-effective base which incorporates a battery pack, electric motor and driveline components.

Fully-scalable to accommodate multiple vehicle types, the platform can be used to accelerate vehicle development to meet diverse customer needs. Currently, Arrival is carrying out pilot projects with multiple logistics companies in Europe using cargo vans manufactured with the technology.

With the rapid global growth in online shopping, the volume of light commercial vehicles in urban areas has increased. The demand for eco-friendly commercial vehicles is expected to continue growing as environmental regulations tighten. From 2021, the EU will introduce the world’s most stringent vehicle emission regulations, limiting each automaker’s fleet-wide average CO2 emissions by around 27%, from 130 g/km to 95 g/km.

By working with Arrival, Hyundai and Kia plan to supply eco-friendly vans and other commercial vehicles – built in volume and based on Arrival’s platform – to European logistics companies and mobility companies that provide on-demand ride-hailing and shuttle services.

PBVs to underpin growth in eco-friendly commercial vehicle sector

Hyundai and Kia recently announced the development of fully-electric Purpose Built Vehicles (PBVs). Hyundai presented its PBV concept as one of the smart mobility solutions at CES 2020 earlier this month. At its CEO Investor Day on January 14, Kia also announced its plan to develop PBVs for shared-service companies and logistics companies.

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.”

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”, added Avinash Rugoobur, Chief Strategy Officer of Arrival.

The partnership with Arrival enables Hyundai to accelerate its ‘Two-track’ strategy to deliver battery electric and hydrogen fuel cell solutions for the European commercial vehicle market. To further support that strategy, Hyundai recently established Hyundai Hydrogen Mobility (HHM), the joint venture between Hyundai and Swiss hydrogen energy company H2 Energy. It aims to export 1,600 hydrogen fuel cell trucks to Europe by 2025, following the first export to Europe on January 3 as part of a pilot program.

Under the ‘open innovation’ spirit, Hyundai and Kia are exploring partnerships with various businesses to build a leadership position in the rapidly expanding global EV market. In May 2019, Hyundai and Kia invested KRW 100 billion (US $90 million) in Rimac, a Croatian high-performance electric vehicle company, focusing on collaborative research to secure capabilities to lead the global high-performance electric vehicle market. 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.

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