Kia and Hyundai invest in Electric commercial vehicles

Hyundai Motor Company and Kia Motors Corporation have announced a strategic investment of €100 million ($A161.4 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 commercial vehicles. 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.

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. Of the total investment, Hyundai will contribute €80 million; Kia €20 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’s CEO Sverdlov added: “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.”

Founded in 2015, Arrival has production plants and R&D centres in the US, 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.

Recently, the British Royal Mail began a trial of nine commercial EVs in partnership with Arrival.

The postal operator is testing the 3.5-, 6- and 7.5-tonne trucks at its Mount Pleasant depot in central London. They will be used to transport packages between mail distribution centres in the city and surrounding area.

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.

The partnership with Arrival enables Hyundai to accelerate its ‘Two-track’ strategy to deliver battery electric and hydrogen fuel cell solutions for the European commercial vehicle market. To further support that strategy, Hyundai recently established Hyundai Hydrogen Mobility (HHM), the joint venture between Hyundai and Swiss hydrogen energy company H2 Energy. It aims to export 1600 hydrogen fuel cell trucks to Europe by 2025, following the first export to Europe on January 3 as part of a pilot program.

In September 2019, Hyundai and Kia also invested in IONITY, Europe’s largest high-power electric vehicle charging network, and set the stage for sales expansion of EVs within Europe.