News of a collaboration with Uber Technologies (NYSE:UBER) has shares of electric vehicle maker Arrival (NASDAQ:ARVL) in overdrive this morning. ARVL stock is up more than 6.6% after slipping the same yesterday in heavier-than-usual trading.
Six weeks after coming public in a reverse merger with CIIG Merger Corporation, U.K.-based Arrival announced that it will develop a new vehicle that will be designed with help from the ride-hailing app’s drivers.
The March SPAC valued the company at $13 billion on completion. The transaction made the six-year-old Arrival the biggest U.K. tech floatation in history.
“The Arrival Car will be designed to be an affordable, purpose-built electric vehicle for ride-hailing, and will be designed in partnership with Uber drivers. Uber drivers will now be invited to join the design process and ensure the final vehicle meets their needs,” the EV developer’s announcement read.
The Arrival car is expected to enter production in the third quarter of 2023. Uber has committed to becoming a fully electric mobility platform across North America and Europe by 2030, and in London by 2025. The two companies will also explore a strategic relationship in key markets, including the U.K. and European Union bloc countries.
ARVL Stock Bucks EV Momentum
Electric vehicle stocks recently sold off, which in many ways is clearing the frothiness out of the sector. However, despite the pullback, these names remain significantly overvalued compared to other areas in the market.
ARVL stock has declined 38% year to date, compared with an 11.3% increase in the S&P 500. UBER stock is up 7.6% for the year.
An Uber driver-designed, purpose-built Arrival Car will join the company’s previously announced commercial products, a bus and a van. The final car design is expected to be published by the end of this year and production is slated for the second half of 2023. Arrival’s decentralized manufacturing model is poised to give it greater flexibility and a quicker path toward commercial production.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News, McKinsey & Co. and McDonald & Company Investments.