Korea’s Hyundai Group is backing a UK electric vehicle startup that plans to begin selling battery-powered delivery vans in 2021, the companies said on Thursday.
Hyundai Motor Co (005380.KS) and sister firm Kia Motors Corp (000270.KS) are making the investment of 100 million euros ($110 million) in Arrival Ltd.
Founded in 2015 and based in London, Arrival has developed a boxy, futuristic-looking shuttle bus aimed at the commercial delivery market. The company said its van will have a range between charges of 300 miles.
In a statement, Arrival said it will work with Hyundai and Kia to develop a variety of electric vehicles, initially for the commercial market. Those vehicles will be built on Arrival’s modular vehicle platform or “skateboard” that bundles motor, batteries and chassis components, similar to the skateboard developed by U.S. startup Rivian.
Rivian is backed by Ford Motor Co (F.N) and Amazon (AMZN.O), and has a contract to build 100,000 electric delivery vans for the e-commerce giant, starting in 2021.
Hyundai and Kia last year invested $89 million in Rimac Automobili, a nine-year-old Croatian company aspiring to build electric supercars that is also backed by Porsche AG (000270.KS).
Arrival said its vehicles will be equipped with advanced driver assist features and can be upgraded with self-driving systems.
The vehicles are designed to sell for the same price as similar models powered by internal combustion engines and to be built in small “microfactories.” That strategy is the opposite of U.S. electric vehicle rival Tesla (TSLA.O) which uses massive “gigafactories.”
Last fall, Arrival, which until now has operated largely in stealth mode, hired General Motors (GM.N) veteran Michael Ableson to head its new North American operations.
With a small factory in Banbury, England, Arrival said it now has 800 employees in five countries, including Germany, Russia and Israel.
Arrival previously said it would use BlackBerry’s (BB.TO) QNX operating system to connect safety features in its electric vehicles.
Arrival said its prototype delivery vans are being tested by the Royal Mail, DHL and UPS.