New funding values start-up at €3bn and will power US expansion of Hyundai-backed group
BlackRock has invested $118m in Arrival in a deal that values the UK electric vehicle start-up at €3bn and allows the group to open its first US factory.
The fund manager invested in a fundraising round alongside carmaker Hyundai-Kia in January, but BlackRock’s involvement was delayed in part because of the pandemic. Hyundai-Kia invested €100m.
The boon for Arrival comes as the wider UK auto industry struggles to attract international investment, weighed down in part by concerns over the country’s trading conditions with the EU after Brexit.
Arrival, which has developed a battery system to drive custom-designed buses and vans, operates “microfactories” that allows it to build small production facilities close to its customers.
Work is already under way on sites in Reading, Bicester and Banbury.
Its sites are capable of producing about 10,000 vehicles a year, roughly a 20th of the output of a modest traditional car plant.
Following BlackRock’s investment, the group plans to spend $46m opening its first North American factory in South Carolina.
While the company has not announced the customer for its US vehicles — or what it will make at the site — the group already has a global order for up to 20,000 electric vehicles from international delivery group UPS.
In January, UPS purchased 10,000 vans, with the option to buy another 10,000.
“This investment is a reflection of the significant market opportunity for electric vehicles, particularly in the commercial segment,” said Denis Sverdlov, Arrival’s founder and chief executive.
The market is predicted to reach 8m commercial and passenger fleets by 2030 in the US alone, he added.
Work has already started on the South Carolina site, which is expected to open in the second quarter of 2021 and begin producing vehicles by the end of the year. “We couldn’t be happier that Arrival has decided to build zero-emissions EVs right here in South Carolina,” said Henry McMaster, state governor.
Arrival already has a site planned in New Jersey but has not yet announced whether the facility will be a factory or a technology centre.
Delivery companies are moving into electric vehicles, particularly for vans used for inner-city travel. Last year Amazon placed an order for 100,000 electric vans from start-up Rivian.
Arrival’s electric vans, which are intended to replace diesel models, have a driving range of up to 200 miles on a single charge. The company claims they are comparable in price to diesels but with lower running costs.