Shares of electric-vehicle maker Arrival (ARVL 5.07%) jumped by as much as 10% on Tuesday morning before giving back some of those gains. As of 12:15 p.m. EDT, the stock was still up by about 4.3% on the day.
The share price jump came after the U.K.-based company said it was partnering with Uber Technologies (UBER 1.93%) on a program to make electric cars specifically for the ride-hailing industry. It plans to have a new Arrival car in production by the third quarter of 2023. The company said it will involve Uber drivers in the design process to "prioritize driver comfort, safety, and convenience." Arrival said the car's design should be ready by the end of 2021.
Until now, Arrival only had announced plans for electric buses and delivery vans. Its decentralized business strategy is to build small "microfactories" close to the markets in which its vehicles will be sold. Management asserts that this plan adds flexibility and reduces its capital costs. It has announced its first two factories in the U.S. will be in Rock Hill, South Carolina, and Charlotte, North Carolina. The Charlotte facility will provide United Parcel Service (UPS -0.14%) with electric delivery vans. UPS is an investor in Arrival and has placed an initial order for 10,000 of its trucks.
Uber has committed to becoming a fully electric platform by 2025 in London and by 2030 across North America and Europe. Its Uber Green platform allows customers to request electric or hybrid car options.
The Arrival car will launch in London. "We have a great partnership with UPS to create a best-in-class electric delivery vehicle, and we hope to replicate that success with Uber as we develop the best possible product for ride-hailing," said Tom Elvidge, senior vice president of Arrival Mobility U.K. in a statement.