Arrival, the UK-founded and based electric vans start-up, has struck a deal with Uber that will see the two companies develop an electric taxi in partnership. Arrival is known for its electric van prototype but with Uber’s help, it will now start work developing a design for an Arrival Car.
Despite achieving the largest-ever IPO valuation for a British tech company when listing on Wall Street’s Nasdaq exchange in March at $13 billion, Arrival has yet to actually commercially produce any vehicles. It does, however, have an agreement with U.S. courier company UPS, also a significant investor, for 10,000 all-electric delivery vans and an option for 10,000 more.
The tie-up with Uber will see the ride-hailing company’s drivers help design the new Arrival Car, with plans for the vehicle to enter production as soon as next year. Uber has the stated goal of ensuring all 45,000 of its London drivers are at the wheels of electric vehicles. Uber drivers across the rest of the UK should also be all-electric by 2030.
When Arrival listed on the Nasdaq in March at a $13 billion (£9.5 billion) valuation, it made a commitment to IPO investors to add a “small vehicle” to its prototype electric vans and buses. The partnership with Uber should see that commitment met. The company was established 6 years ago with the goal of producing simple, cheap, customisable electric vehicles for large-scale commercial use.
Despite opting for a Wall Street listing, Arrival was founded in the UK and its research and development facility, where it manufactures prototypes is based in Banbury, Oxfordshire. The company’s head office is in London. 1900 people are employed across bases in the UK, Europe, Israel, and the USA.
While the fact Arrival has yet to mass produce any vehicles and has so far only manufactured prototypes has to raise some questions around its lofty valuation, investors like its strategy of teaming up with large operators to meet specific needs.
Its bus is being built to spec for FirstGroup, one of the UK’s largest bus operators, who will start test driving the first prototypes early next year. Arrival’s van is, as mentioned, being built for UPS who have ordered 10,000 upfront in a deal worth £340 million. The first deliveries of the fleet are due to start in the middle of next year.
All of Arrival’s models across vehicle types are being built to the same 3 key principles:
- The battery should last a full working day on a single change.
- They should not cost more than popular alternatives. In the case of the Arrival Car, that would be the Toyota Prius, the model which currently accounts for 40% of all Uber cabs in the UK.
- It should be more durable than the most popular alternative.
Arrival’s senior vice-president for the UK Tom Elvidge explains:
“A principle for all of Arrival’s vehicles is that there should not be a premium for the decision to go electric.”
The Arrival Car would be accredited as a vehicle eligible to drivers as part of Uber’s London clean air plan. Over the past new years the plan has raised £135 million from ride sur-changes and will help drivers cover the cost of switching to an electric vehicle. However, the deal with Uber is not exclusive and the Arrival Car will be made available to all drivers working with companies or through other ride-hailing apps.