UPS invests in electric vehicle pioneer Arrival, as delivery giant places order for 10,000 vans
UPS has announced that it has completed a minority investment in U.K.-based electric vehicle (EV) pioneer Arrival in a move that has seen the global logistics giant place an order for 10,000 purpose-built electric vans.
The move comes just days after Arrival grabbed headlines with the announcement that auto giants Hyundai and Kia have invested $110.38 million in the company, making the EV innovator one of the United Kingdom's most valuable start-ups.
Alongside the investment from venture arm UPS Ventures — financial details for which were not disclosed — UPS has both committed to purchase 10,000 EVs to be built for UPS with priority access to purchase additional EVs.
As such, UPS will collaborate with Arrival to develop a wide range of EVs with Advanced Driver-Assistance Systems (ADAS). The technology is designed to increase safety and operating efficiencies, including the potential for automated movements in UPS depots.
"UPS continues to build an integrated fleet of electric vehicles, combined with innovative, large-scale fleet charging technology," said Juan Perez, UPS chief information and engineering officer. "As mega-trends like population growth, urban migration and e-commerce continue to accelerate, we recognize the need to work with partners around the world to solve both road congestion and pollution challenges for our customers and the communities we serve.
"Electric vehicles form a cornerstone to our sustainable urban delivery strategies. Taking an active investment role in Arrival enables UPS to collaborate on the design and production of the world's most advanced electric delivery vehicles."
Arrival has pioneered an approach where it has developed its own major core vehicle components such as chassis, powertrain, body and electronic controls, but then uses a modular design with standardized parts to produce customized vehicles for customers — an approach that the company claims reduces maintenance and other costs of ownership.
Under the deal with UPS, Arrival will build the vehicles in micro-factories, using lightweight, durable materials the company designs and creates in-house. As an investor, UPS will have the option to fast-track orders as necessary as it moves to deploy the vehicles in Europe and North America.
"UPS has been a strong strategic partner of Arrival's, providing valuable insight into how electric delivery vans are used on the road and, importantly, how they can be completely optimized for drivers," said Denis Sverdlov, Arrival chief executive. "Together, our teams have been working hard to create bespoke electric vehicles, based on our flexible skateboard platforms that meet the end-to-end needs of UPS from driving, loading/unloading and back-office operations. We are pleased that today's investment and vehicle order creates even closer ties between our two companies."
The news comes the same day as rival delivery giant DPD confirmed it will take delivery of 300 new electric Nissan vans by May, in what it said is one of the largest U.K. electric van orders to date. Once delivered, the new vans will take DPD's total electric fleet to 450, putting it on course to hit 500 electric vans by the end of 2020.
"This is a real landmark day in the move to a more sustainable future for the parcel industry," said DPD CEO Dwain McDonald. "These vehicles are changing the way we work. It isn't just a case of plugging them in and saying, 'Job done.' We are rethinking and re-engineering how we deliver parcels now and in the future with different route networks and new types of depots. It is an all-encompassing revolution for our industry and electric, emission-free vehicles are at the heart of that vision."