Arrival Teams Up With Uber To Make An Electric Vehicle Specifically For Ride-Hailing

Electric vehicle maker Arrival Group SA ARVL and Uber Technologies Inc UBER are working together to develop an electric vehicle purpose-built for ride-hailing services, Reuters reported on Tuesday.

What Happened: Arrival plans to launch an affordable electric vehicle aimed at ride-hailing services across the globe, with production slated for 2023. The United Kingdom-based startup will not make electric cars exclusively for Uber; the two companies plan to explore a strategic relationship in the United Kingdom, European Union and the United States.

Uber aims to offer fully electric services in London by 2025 and by 2030 in Europe and North America.

The development comes on the heels of  Arrival becoming a publicly traded company in March after merging with a special purpose acquisition company, or SPAC, and raising $660 million.

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Why It Matters: Arrival secured its biggest public order for up to 10,000 vans from United Parcel Service Inc UPS last year, which also owns a stake in Arrival.

“We have a great partnership with UPS ... and we hope to replicate that success with Uber as we develop the best possible product for ride hailing,” Arrival Senior Vice President Tom Elvidge said in a statement, as noted by Gizmodo.

The EV startup claims it is able to keep costs low and competitive thanks to its vertical integration business model that relies on in-house components, materials and software.

See Also: EV Manufacturer Arrival Talks SPAC Deal, Benefits Of Business Model

The company has already built a few prototype vans but is yet to begin testing them on public roads. Arrival had earlier this year told Benzinga it expects to start production of its electric buses by the fourth quarter of 2021, and electric vans are slated to launch in the second quarter of 2022.

Price Action: Arrival shares closed 6.72% lower at $17.35 on Monday and were up 3.52% in after hours trading. Uber shares closed 0.15% higher at $54.85.