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Why Arrival Group Stock Jumped Double Digits Wednesday

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

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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.

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Stocks Mentioned

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

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

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