UPS invested in Arrival: details of the deal
UPS company from the USA provides express delivery services and specializes in solving logistic problems. The other day it became known that it signed a contract for the purchase of 10 thousand electric cars from Arrival startup.
United Parcel Service company is a major player in the market of logistics services. Not so long ago the management decided to reform the transport division to improve the level of service and to keep pace with modern trends. To this end, the company drew attention to the UK startup Arrival, which develops digital products for electric cars. UPS purchased the company’s shares and ordered the production of 10 thousand vehicles. According to the British authoritative publication The Guardian, so far the deal has amounted to 400 million euros, but it is possible that in the future it will reach 600 million euros. It all depends on the equipment of the vehicles, their technical characteristics. Based on these figures, the cost of one car will cost the American express delivery service about 40-60 thousand euros. To buy a new electric car Tesla 3 you need almost the same amount – a car from Elon Musk costs about 40 thousand dollars. Interestingly, the price of a truck with an internal combustion engine from Ford Transit is 34.5 thousand dollars, but this figure does not include fuel costs, which will be definitely more than the consumption of electricity for electric cars.
Startup Arrival is actively developing. According to the company’s plans, their first vehicles on electric traction will appear in 2020-2024 and will be presented in the UK, USA and EU markets. Besides, UPS has the exclusive right to purchase 10 thousand copies. The first batch will arrive already this year.
Not only the American company was interested in the startup and invested in it. At the end of January, Korean manufacturers Hyundai and Kia Motors funded the development of Arrival 100 million euros. According to preliminary estimates, the cost of the startup is about 3 billion euros. The car companies now own a 3.3% stake in the company and have signed a strategic plan with Arrival, which implies expansion of production of electric cars and entry into this market with competitive products.
Back in 2018, representatives of UPS and Arrival announced the joint production of 35 electric vehicles, which will be used for cargo transportation in London and Paris. Currently, there are more than 300 electric cars and 700 hybrid cars in the express delivery service fleet. In addition, the company plans to reduce the use of traditional fuel by 25% in 2020, replacing it with an alternative fuel.