(ATF) A British electric van and bus maker on Tuesday announced it would build an electric car for Uber Technologies, launching mass production that could challenge China's dominance of the electric vehicle (EV) fleet sector.
The EV will go into production in late 2023, Arrival and Uber said, adding that they would also explore a strategic relationship in key markets, including the United Kingdom, European Union and United States.
The "Arrival Car" will be an "affordable, purpose-built electric vehicle for ride-hailing," and will go into production in the fourth quarter of 2023, the companies said.
Uber plans to be a fully electric mobility platform in London by 2025, and across North America and Europe by 2030. The company has raised more than 135 million pounds ($188 million) to help its drivers in London upgrade to EVs by 2025.
"Our focus is now on encouraging drivers to use this money to help them upgrade to an electric vehicle, and our partnership with Arrival will help us achieve this goal," Jamie Heywood, Uber regional manager for northern and eastern Europe, said in a statement.
Uber aims to sign up an additional 20,000 drivers in Britain as the lifting of Covid-19 pandemic restrictions boosts demand, the ride-hailing app said last week.
The Arrival Car will need to withstand the high demands of an Uber driver - ride-hailing cars drive up to 50,000 kilometres (31,000 miles) annually, versus 12,000 km for the average car.
It faces competition in the US from the likes of Electric Last Mile Solutions (ELMS), which said on Monday it signed a letter of intent for Cox Automotive to supply service and repairs for the delivery van it will launch later this year.
ELMS plans to launch a small electric van at the end of the third quarter, followed by a larger truck in the second half of 2022. The Troy, Michigan-based manufacturer will go public through a reverse merger with special-purpose acquisition company (SPAC) in the second quarter.
Both vehicles will be assembled at the former Hummer plant in Mishawaka, Indiana, that ELMS intends to acquire from Chinese EV and automotive parts company Chongqing Sokon Industry Group when the SPAC deal closes.
The ELMS-Sokon deal underscores Chinese interest in EV fleets, as sales in both China and Europe are led by the electrification of government and corporate fleets.
"China’s early EV market strategy was to push their application in government and public fleets," Jin Lingzhi of the International Council on Clean Transportation, said. "As a result, electric buses and micro electric cars that are largely used in car-sharing fleets are some of the most successful niche markets."
More than half of EV sales of SAIC Motor Corp's Roewe 550 in 2020 were to fleets, according to Bernstein analysis. Another Chinese electric carmaker, WM Motor, has said the company is targeting government fleet purchases. Other companies, such as NIO and Byton, have targeted higher-end customers, shunning fleet sales.
Chinese companies have also long sought to enter international fleet markets. Last year, BYD announced a 2,000-car taxi fleet for Sydney. In 2019, it launched an electric bus pilot plan in Costa Rica and started Latin America's first electric bus corridor serviced in Santiago. BYD also launched an electric taxi fleet in Panama.
The global market for electric cars is set for a decade of strong expansion after sales surged more than 40% last year despite pandemic-induced recessions and in contrast to the total contraction of automobile sales.
One leader in the market is the development of mass fleets of EVs. Shenzhen, one of China’s major cities, has an almost entirely electric-powered taxi fleet. The high-tech hub announced at the start of this year that 99% of the 21,689 taxis in the city were electric.
The worldwide number of electric cars, vans, heavy trucks and buses will rise to 145 million by 2030, up from about 10 million at the end of last year, according to recent International Energy Agency data.
A record 3 million new electric cars were registered in 2020, up 41% from 2019, while the global car market shrank 16%. Europe overtook China as the world's largest EV market for the first time.
With reporting by Reuters