Please ensure Javascript is enabled for purposes of website accessibility

Why Arrival Group Stock Jumped Double Digits Wednesday

By Howard Smith - Apr 21, 2021 at 4:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The electric vehicle company hit what it called a "major milestone" today.

What happened

UK-based electric vehicle company Arrival (ARVL -1.90%) doesn't expect to begin production of its first commercial product until later this year, but it hit what it called a "major milestone" today. On a day when stocks in the electric vehicle (EV) sector were already moving higher, Arrival shares jumped as much as 18% before closing 12% higher on the day. 

So what

Today, the company announced via Twitter (TWTR 2.25%) that it delivered its first prototype electric delivery van to investor and customer United Parcel Service (UPS 1.34%). Along with an investment in the start-up, UPS has ordered 10,000 of the company's purpose-built electric delivery vans. Arrival has also announced it will build its first two U.S. "microfactories" in Rock Hill, SC and Charlotte, NC. The latter will initially specifically produce vans to supply UPS. 

Arrival microfactory with robots and UPS electric van in foreground

Arrival delivered its first prototype delivery van to UPS today. Image source: Arrival.

Now what

Arrival plans to use a decentralized manufacturing model. It believes the microfactories give it more flexibility and require less invested capital than traditional manufacturing facilities. It says it can have these facilities operational within six months and can use existing commercial spaces and warehouses to bring production close to individual cities and customers.

As with other pre-revenue electric vehicle companies, an investment in Arrival at this stage is speculation. But getting its first prototype EV van to UPS for testing is a step toward commercialization, and investors are noticing today.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Arrival Limited Stock Quote
Arrival Limited
$1.55 (-1.90%) $0.03
United Parcel Service, Inc. Stock Quote
United Parcel Service, Inc.
$184.99 (1.34%) $2.45
Twitter, Inc. Stock Quote
Twitter, Inc.
$38.23 (2.25%) $0.84

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.