Hyundai and Kia have made an £85m investment in UK startup Arrival under a new partnership to develop “competitively priced” small- and medium-sized electric vans.

The £85m investment enables co-development of eco-friendly vans and other products for logistics, on-demand ride-hailing, and shuttle service companies

The partnership is founded on the use of Arrival’s scalable ‘skateboard’ platform technology, which offers multiple options that will be explored by the carmakers to develop future Purpose Built Vehicles (PBV) from Hyundai and Kia. This includes vans for logistics and fleet operations but the partnership will also yield products that will provide solutions for on-demand ride-hailing and shuttle service companies.

It’s the latest project to come out of the carmakers’ plans to evolve, not just past internal combustion-engined vehicles into EVs but also into wider mobility solutions that advance current work on alternatively fuelled cars.

Earlier this week, Kia revealed a new strategy that will see it offer a line-up of 11 fully electric vehicles by 2025 – dubbed ‘Plan S’ to mark the brand’s shift in focus and including plans to enter the PBV sector. Kia Motors president and CEO Han-woo Park said the brand will “actively innovate to take on the challenges ahead, identifying and capitalising on new opportunities to propel the company forward”.

For Arrival – already named as listed in the UK’s top 25 startups as of September 2019 – the project will showcase the abilities of its Generation 2.0 electric vehicles, which include inhouse developed software, materials, components and other technologies. Previous work by Arrival has seen it develop electric trucks for Royal Mail.

The carmakers’ total £85m (€100m) investment will be made up of £68m (€80m) from Hyundai and £17m (€20m) from Kia.

Albert Biermann, president and head of research and development division for Hyundai Motor Group, said: “The eco-friendly vehicle market in Europe is expected to grow rapidly due to the introduction of further environmental regulations. Through the joint development of electric commercial vehicles with Arrival, we will be able to gain a competitive advantage and progressively establish our leadership in the global eco-friendly vehicle market, with Europe at the forefront.”

Arrival’s CEO Sverdlov added: “Arrival has created a game changing product category – Generation 2 Electric Vehicles. Hyundai and Kia make world-class vehicles with uncompromising quality. This strategic partnership will empower our companies to scale Generation 2 Electric Vehicles globally.”