Arrival (NASDAQ:ARVL) continues to look poised to be an electric vehicle heavyweight and a disruptor within the automotive industry. Consequently, I strongly recommend buying ARVL stock.
Arrival’s advancing partnership with UPS (NYSE:UPS) and its new alliance with Uber (NYSE:UBER) show that the EV maker is a star player in a segment that has become filled with companies that probably aren’t going to survive the final cuts.
It’s evident that Arrival’s EVs are very attractive to companies with large fleets.
As I noted in a previous column about ARVL stock and UPS, “Arrival presented the delivery giant with a ‘prototype’ of its electric delivery vehicle. In a video tweeted out by Arrival on April 21, Luke Wake, VP of Maintenance & Engineering, UPS Corporate Automotive, said the EV would be “upgradeable, adaptable, and future-proof.”
Wake added that the launch of the prototype was just the beginning of a relationship the two companies expected to grow.
UPS has ordered 10,000 delivery vans from Arrival, according to reports, and is quite satisfied with the EV maker’s work up to this point and is looking forward to rapidly advancing the companies’ alliance.
That, of course, is great news for the owners of ARVL stock.
Partnerships and ARVL Stock
On May 4, Arrival announced that it would collaborate with Uber on an affordable vehicle friendly to ride-sharing drivers. The EV is expected to be churned out starting in the third quarter of 2023.
In light of Uber’s huge presence around the world and the gigantic size of the global ride-sharing market, the deal is clearly a game-changer for Arrival.
I don’t believe that Uber would spend a meaningful amount of time and money on the alliance unless it plans to buy a significant number of EVs from Arrival.
Uber has announced that it would seek to switch its London drivers to all EVs by 2025, it is indeed likely to buy a sizeable number of EVs in the coming years.
Those purchases, in turn, will likely spur many other providers of ride-hailing services to buy Arrival’s EVs.
It’s possible that Arrival will eventually enter the consumer EV sector and use the prominence it gained through ride-hailing deals to become a major player in that space.
Hyundai and Kia have invested €100 million in Arrival. First Bus, a top British mass-transit company, is testing the company’s electric bus and the U.K.’s mail carrier is evaluating its vans.
Wolfe analyst Scott Group expects Arrival’s percentage of the van and bus markets to constantly grow. He suggested that the automaker’s annual sales could eventually reach $15 billion to $26 billion.
The Bottom Line on ARVL Stock
Given its flourishing partnership with UPS, its new alliance with Uber, its trials in the UK and its low-cost commercial EVs, Arrival is clearly poised to make a huge impact in the EV sector.
I believe that it’s poised to become a strong player in the commercial EV space.
With a current market capitalization of $11.5 billion ARVL stock is a true bargain for longer-term investors.
On the date of publication, Larry Ramer held a long position in ARVL.
Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.