Arrival, an electric vehicle maker backed by Hyundai and Kia that’s preparing to build electric delivery vans for UPS, just raised $118 million from investment giant BlackRock
BlackRock’s investment is the biggest infusion of funds Arrival has won to date and comes days after the company said its first U.S. “microfactory” will be built in South Carolina. The $46 million facility will be able to make as many as 1,000 electric buses a year and employ 240 people when it opens late next year. Arrival’s first microfactory, in Bicester, England, also opens in 2021.
“This additional capital will be invested into Arrival’s growth, as we deepen and expand our presence in the U.S. and other new markets globally,” founder and CEO Denis Sverdlov said. “With our new microfactory in South Carolina, we are looking forward to partnering with more cities and companies to create a sustainable future.”
Founded in London in 2015 by entrepreneur Sverdlov, who made an undisclosed fortune from his sale of Russian cell phone company Yota in 2012, Arrival aims to be a leading provider of electric trucks and buses as demand for emission-free vehicles expands. The company says its commercial vans will cost the same as conventional models running on diesel or gasoline and that its electric buses will be the most affordable on the market, allowing them to be sold without heavy public subsidies. Likewise, it says it can sell electric transit buses at much lower prices than those of industry heavyweights, which include New Flyer, Proterra and BYD.
The company came out of semi-stealth with a bang early this year when Hyundai and Kia bought a 100 million euro ($110 million) stake. That boosted its valuation to more than $3 billion. Soon after UPS, which is also an investor, said it would buy up to 10,000 Arrival electric delivery vans for its fleet in a deal that ultimately could be worth nearly $500 million. If things go well, UPS has an option to buy an additional 10,000 for its global fleet. BlackRock’s backing boosts total funding for Arrival to at least $230 million.
Instead of building massive, multibillion-dollar auto plants, Arrival says it can hold down the cost of battery-powered vehicles by using lighter-weight materials, including aluminum instead of steel for the frame, and body panels made of proprietary composite materials developed in-house. Its microfactory concept–which can be set up in standard warehouses and needs only about 200,000-square-feet–makes the manufacturing inexpensive as possible.
The company says it can set up and equip a microfactory in a conventional warehouse space in about six months, rather than requiring hundreds of acres of land needed for a large-scale plant. As business expands, The plan is to quickly build microfactories close to fleet customers to hold down shipping costs and scale the facilities to churn out either 10,000 vans or 1,000 buses per year.
The South Carolina factory “is the beginning of a paradigm shift in the EV space,” Mike Abelson, Arrival’s North American CEO, a former General Motors
Microfactories don’t use costly metal stamping presses, welding or paint shops and don’t use fixed assembly lines. Instead, its flat, skateboard chassis is put together from extruded aluminum components, body panels are joined with aerospace-style adhesives and coloring is done by dying the composite material or wrapping a vehicle. Automated guide vehicles carry sections of the body to assembly cells throughout the factory.
Weight is key to holding down electric vehicle costs because that determines how big a battery is needed to attain the desired mileage range per charge. The lithium-ion battery is the costliest component, prices escalate rapidly as weight increases.
This week Arrival said buses it will make in Rock Hill, South Carolina will weigh in at 35,250 pounds when loaded with passengers. If accurate, that’s 6,750 pounds lighter than the total weight with passengers for Proterra’s 35-foot Catalyst model. Arrival hasn’t provided prices for its bus, but diesel-powered models go for about $500,000 each and battery-powered versions can sell for at least $200,000 more.