Hyundai Motor Company and Kia Motors Corporation today announced a strategic investment of EUR100 million (USD110 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, South Korea. Of the total investment, Hyundai will contribute EUR80 million; Kia EUR20 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 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,” said Sverdlov.

Founded in 2015, Arrival has production plants and R&D centers in the U.S., 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.