Hyundai Motor Co. and Kia Motors Corp. said they will invest a combined €100 million in U.K.-based electric vehicle startup Arrival under a new partnership to co-develop electric commercial vehicles.
Under the partnership, the South Korean carmakers will gain access to Arrival's modular and scalable "skateboard" vehicle platform and technological know-how, while Arrival will benefit from their global footprint and economies of scale.
The companies will work to develop competitively priced small and medium-sized electric vans and other products targeted at logistics and on-demand ride-hailing and shuttle service companies in Europe.
Arrival retrofits existing conventional automobiles with electric powertrains and plans to build thousands of electric vans with its new EV platform.
Hyundai will contribute €80 million, and Kia will provide €20 million toward the investment. The funding values the startup at €3 billion, the Financial Times (London) reported.
"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," Hyundai President and Head of Research and Development Albert Biermann said in a statement.
The move is part of the Hyundai Motor Group's planned 100 trillion South Korean won investment in electrification, autonomous driving and mobility services over the next five years.
During its CEO investor day in December 2019, Hyundai disclosed its plans to become a smart mobility solution provider by 2025, pledging 61.1 trillion won on research and development and the exploration of future technologies.
"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," Avinash Rugoobur, Arrival's chief strategy officer, said.
J.P. Morgan acted as exclusive financial adviser and placement agent in connection with the class A funding round.
As of Jan. 15, US$1 was equivalent to 1,158.05 South Korean won.