UPS to Build an Electric Fleet of 10,000 Vehicles

Investments in new delivery vehicles continues to be the hot new trend amongst the shipping carriers. Last month, USPS announced the next generation of Postal Service trucks, in a partnership with Oshkosh Defense. This week, UPS has announced their own partnership with electric-vehicle startup Arrival. The company, based in Britain, will help UPS to build an electric fleet of 10,000 vehicles in Charlotte, North Carolina, where they plan to construct a second “micro-factory.”

The Company Building the New UPS Electric Fleet

Arrival is an electric vehicle startup based in Britain. It’s U.S. headquarters are in Charlotte, the location of their second planned micro-factory. Arrival is investing more than $41 million into this facility, and has no plans to stop there.

In a “Mad Money” interview, President Avinash Rugoobur spoke to Jim Cramer about Arrival, and how the company maintains a competitive advantage. According to Rugoobur, Arrival’s advantage comes from designing its own batteries and other components in-house, as well as by writing its own software.

In addition, Arrival’s micro-factories require less space and capital investments than traditional manufacturing facilities. This allows the company to remain more nimble than its competitors, and to build more of these facilities across the globe.

“We’re partnering with the city of Charlotte to produce a whole transportation ecosystem together,” Rugoobur said. “When you look at the global scale that needs to shift to being electric, we expect to have micro-factories all around the world.”

As a result of the facility build-out and operations, Arrival will create just under 1,000 jobs in the Charlotte area.

While Other Carriers Embrace Electric Vehicles, USPS Lags Behind

UPS isn’t the only carrier rolling out all-new electric vehicles. Amazon recently made major investments into its own all-electric vehicle fleet. However, one carrier is significantly lacking in the clean power department: the US Postal Service.

As part of the Postal Service’s investment in a new fleet, Oshkosh will build anywhere from 50,000 to 165,000 vehicles. However, only 10% of that new fleet will be electric. In response, Democrats introduced a bill to give USPS $6 billion dedicated to building more electric vehicles. Still, the bill is highly unlikely to become law, and will not affect Oshkosh’s current production schedule.

The Next Steps for UPS and Arrival

UPS placed the initial order with Arrival almost a year ago for 10,000 Generation 2 Electric Vehicles. This investment was indicative of the carrier’s desire to eventually transition its entire fleet of vans to electric power. In exchange for the investment and the contract, UPS also took a stake in Arrival. Arrival expects the new UPS electric vehicles to hit the streets over the next four years, and will list stock on public markets via a blank-check merger in the meantime, trading under the symbol ARVL.