The days of small-scale pilots in the commercial fleet market would seem to be over, and good riddance to them. It was Amazon that started the betting with its order of 100,000 vans from Michigan startup Rivian, but now the venerable Big Brown has joined game with an order of its own from UK startup Arrival.
UPS will pay Arrival a reported sum of £339 million for 10,000 purpose-built electric vans, with an option for 10,000 more. The new EVs will be rolled out between this year and 2024 in the UK, Europe and North America.
UPS will also take an undisclosed equity stake in Arrival. (In January, the company secured €100 from Hyundai and Kia.)
Arrival, founded by Russian entrepreneur Denis Sverdlov in 2015, says it can develop its EV platform for a mere £100 million, relying on a modular vehicle design and heavily automated production at “microfactories.” The company has built some vans at the first of these plants, in Banbury, Oxfordshire, but says future production will take place close to end markets such as New York and Los Angeles.
UPS wants to solve the “chicken and egg” problem of a paltry supply of electric vans on the market, Luke Wake, UPS’s International Director of Automotive Engineering, told the Guardian. “There is demand there. We want a supply that can help fulfil that. Our goal is to use electric vehicles in a way that can be scaled.”
“UPS has been a strong strategic partner of Arrival, providing valuable insight to how electric delivery vans are used on the road and how they can be optimised for drivers,” said Sverdlov. “Together our teams have been creating bespoke electric vehicles, based on our flexible skateboard platforms, that meet the end-to-end needs of UPS from driving, loading/unloading, depot and back office operations.”
The order represents some much-needed good news for the UK auto industry, which has been in a three-year decline amid Brexit uncertainty and industry restructuring. As the BBC reports, electric and hybrid vehicles have been about the only bright spot – production rose 34.7% in 2019, as the overall auto market fell 14.2%.