When Hyundai and KIA announced last week that they were jointly investing $100 million in UK startup Arrival, they probably knew something we didn’t know — until now. UPS has signed a deal with Arrival to buy 10,000 of its electric delivery vans between now and 2024 and to possibly purchase another 10,000 after that. The vans will be placed in service in the UK, Europe, and North America. UPS has also invested an undisclosed amount in the company.
The reason why UPS would do this is pretty simple. The Arrival electric delivery vans are priced about the same as conventional delivery vans but have 50% lower operating costs. What fleet manager wouldn’t get excited about that deal?
In an e-mail to CleanTechnica, Denis Sverdlov, CEO of Arrival, said, “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 optimized for drivers. 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. We are pleased that today’s investment and vehicle order creates even closer ties between our two companies.”
Arrival has developed components, sustainable materials, and software to customize both the vehicles commercial fleet owners use as well as strategies to streamline their operations to drive down costs. Arrival’s unique skateboard platforms allow the company to create vehicles in any weight, type, size, or shape to match customer requirements.
The company’s micro-factories can be rapidly deployed close to areas of demand across the globe. In theory, that means those micro-factories could be located near the UPS hubs where the delivery vans will be used. It will be interesting to see how the micro-factory concept plays out in practice.
In the same e-mail, Avinash Rugoobur, chief strategy officer for Arrival, added, “Arrival has created Generation 2 electric vehicles that are better in price, design and experience than traditional fossil fuel vehicles and existing EVs. This gives fleet managers a highly compelling commercial and environmental reason to switch to electric and will accelerate the adoption of electric technology globally. At Arrival, we believe these are among the most impactful areas to start the transition to a fully electric future, and our partnership with UPS will drive us both towards our shared vision of cleaner mobility.”
The market for delivery vans and trucks is huge. Many of them are powered by diesel engines because of their reputation for longevity and fuel efficiency. But they also spew fine particulates into the atmosphere in their wake (gasoline engines do also, but to a lesser degree). The medical and scientific communities are just beginning to understand the impact those particles have on human health.
Not to put too fine a point on it, they are known to promote respiratory and circulatory diseases that make people sick and shorten their lives. That is why it is imperative that we stop burning fossil fuels in our vehicles. (Slowing global heating is another excellent reason to do so.) But if you are a fleet manager, operating costs are the bottom line. If Arrival can really make electric delivery vans that do the job reliably at lower cost than conventional vans, the world will beat a path to their door, demanding they make more — an enviable position for any startup.
Worldwide, there are more than 300 million commercial vans and trucks on the road. As internet shopping has exploded in popularity, the need for more delivery vehicles has risen as well. Over the past decade the number of parcels delivered per day in NYC alone has quadrupled to 1.5 million while van mileage in the UK has grown 56% since 2000.
Amazon is leading the charge to deliver stuff that people used to go to stores to purchase. It has invested $700 million in Rivian and ordered 10,000 electric delivery vans from it as well as it attempts to keep its operations as green as possible during a period of explosive growth.
Arrival says the delivery business, with its predictable routes and the ability to recharge vehicles overnight, makes commercial vehicles perfectly suited for the switch to electric propulsion. The ability to have an impact on climate change at the same time is just the icing on the cake.
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