Kia, Hyundai Join List Of Tesla Competitors, Invest $100M In EV Startup

Two South Korean carmakers have pooled their money in an electric vehicle that is powered by the mobile phone maker Blackberry.

On Thursday, Jan. 16, Kia Motors and Hyundai Motor company invested £85 million ($110 million) in London-based Accelerate to roll out a fleet of battery-powered delivery vans. The startup EV maker is now valued at $3.6 billion, according to Tech Crunch.

Hyundai's president and chief innovation officer, Youngcho Chi, said in a press statement, "This investment is part of an open innovation strategy pursued by Hyundai and KIA. We will accelerate investment and cooperation with companies with advanced technology such as Arrival, to respond to the rapidly changing eco-friendly vehicle market."

Accelerate was founded in 2015 by a former general director of Yota Group, Denis Sverdlov. It serves a market that's different from what Tesla mostly appeals to but may challenge Tesla's robotaxi plan. Accelerates' vehicles are specifically intended for commercial use, which would rival Rivian that recently received an order from e-commerce giant Amazon for 100,000 delivery vans.

The EV that the company is developing offers a 200-mile range, and its minibus frame has 500 cubic feet of cargo space. It also has predictive maintenance and health monitoring capabilities. But one clear advantage that Tesla's vehicles may have over Accelerate is self-driving.

The American automotive and energy company's planned robotaxi network this year will include vehicles that can drive on their own, thanks to Tesla's full self-driving chip announced last year.

KIA and Hyundai did team up in 2019 in an investment that is geared towards accelerating the development of autonomous vehicle technologies, which could presumably be in the direction where both companies can take Accelerate to.

But as far as the technology goes, Accelerate will be powered by QNX technology, which is licensed by Blackberry.

Another aspect that Accelerate boosts its competitiveness in the dog-eat-dog EV race its low production cost. Accelerate's factory may pale in comparison to Tesla's Gigafactory, but what the company looks for is efficiency.

Accelerate's "microfactories," which is estimated to be around 10,000 square feet, will be situated where its customers are, effectively reducing the costs of transporting the goods to their buyers. Accelerate plans on assembling a fixed 10,000 vans a year with those microfactories.

Accelerate's first prototype is set to hit the road this year.