Does this herald the Koreans' arrival as EV leaders?
Hyundai and Kia have emerged as leaders when it comes to alternative energy sources, with the two Korean brands developing not just hybrids and electric vehicles like the Hyundai Kona EV and Kia Niro EV in recent years, but a range of hydrogen-powered alternatives like the Hyundai Nexo. But there's more to come, as both have committed to a heavily electrified future, with 44 electrified models on the market by 2025, and Kia's first dedicated EV arriving in 2021. Their latest move targets another facet of electric vehicles, however, with a substantial investment of €100 million (approximately $110 million) in Arrival, a British-based EV start-up that will allow Hyundai and Kia to produce emissions-free purpose-built vehicles (PBVs) and take on Rivian, who are producing 100,000 electric vans for Amazon.
The investment in Arrival will focus on the production of small and medium-sized electric vans and other similarly sized commercial vehicles with the primary goal of conquering the logistics and ride-hailing sectors. It'll be easier than you think, as Arrival's scalable 'skateboard' platform can be adapted for uses in various segments, making them an ideal partner to help meet Kia and Hyundai's needs, particularly within the European market where the two will begin their market onslaught.
The contract between the three companies was signed at the Hyundai/Kia headquarters in Seoul, Korea, with Albert Biermann signing on behalf of the Korean manufacturers and Denis Sverdlov, CEO of Arrival, present for the EV start-up. The deal seas Kia put forward €20 million ($22 million) and Hyundai the remaining €80 million ($88 million). Hyundai and Kia will leverage Arrival's existing connections, with the brand already partnering with several logistics firms across Europe.
If this sort of concept seems familiar, it's because, in February of 2019, Amazon invested a massive $700 million in American EV start-up, Rivian, and followed up later in the year by ordering 100,000 electric vans. Ford has also invested heavily in Rivian, putting forward half a billion dollars of their own for the use of Rivian's skateboard vehicle platform.
But we've already seen the first fruits of Hyundai and Kia's latest partnership, at least in concept form, as Hyundai already revealed a PBV concept earlier in the month at the Consumer Electronics Show in Las Vegas. Could this latest investment be the final step for Kia and Hyundai on their way to becoming global automotive superpowers? Only time will tell.