With 500 different electric vehicle (EV) models expected to be available globally by 2022, the consumer EV segment has become fiercely competitive. On a relative basis, the commercial EV segment looks attractive. One company in the commercial EV segment that might be worth considering is Arrival Group (ARVL). The company was recently listed through an SPAC business combination and might still be flying under the radar. It may be a good time to take a deeper look into the business. Looking at the industry, the global commercial EV market is expected to grow at a compound annual growth rate (CAGR) of 41.1% through 2028. Clearly, there is a big opportunity and it seems that Arrival is well positioned to benefit. The Bull Case For Arrival Within the commercial EV industry, Arrival is likely to have a diversified product offering. In the current year, the company plans to unveil the electric bus, with production expected to commence in Q4 2021. In the coming year, the electric and large electric vans are scheduled to be launched. Therefore, the company has an attractive product pipeline and as the order book swells, stock re-rating is likely. Currently, Arrival has an order book worth $1.2 billion from United Parcel Service (UPS). The order is for 10,000 units, with an option for an additional 10,000 electric vans. UPS has an automotive fleet size of 120,000 vehicles, therefore, this might be just the beginning of the order inflow from the delivery company. Another reason to like Arrival is the fact that the company has secured a strategic investment of €100 million from Hyundai and Kia Motors. This is a validation of the company’s technology and software innovation. This strategic collaboration could also help Arrival make inroads into emerging markets. Recently, Cowen & co. initiated coverage on Arrival with an “Outperform” rating and a price target of $28.50. A key reason for Cowen being bullish is the company’s micro-factory approach to manufacturing. To elaborate, the company is using existing warehouses as micro-factories. The company estimates that it would require six months to build a micro-factory, with a capital expenditure of $44 million. With a low capital requirement and a low break-even point, the micro-factory could be a game-changer. In terms of volume, a single micro-factory can produce 10,000 vans on an annual basis. A big advantage here is that Arrival can quickly expand to new geographies. Over the next two years, the company plans to set up micro-factories across the U.S. and European Union. It’s worth noting that the company has gross proceeds of $660 million after the closure of the SPAC business combination. More than 10 micro-factories could be constructed using these proceeds over the next few years. Another advantage of micro-factories is customization. A micro-factory can cater to one large customer for specific van requirements. This is likely to differentiate the company from its peers. In terms of financial projections, Arrival has guided for revenue of $1 billion for FY2022. Revenue is expected to accelerate to $14.1 billion by FY2024. An important point to note is that the company is headquartered in the U.K. The country has an ambitious target of banning petrol and diesel cars by FY2030. Therefore, growth for the EV industry is likely to be strong over the coming decade. The revenue projections should perhaps be taken with a pinch of salt, but there is little doubt that the company’s growth will be robust. Stock Analysis And Ratings Arrival scores an 8 out of 10 on TipRanks’ Smart Score rating system. This implies that the stock is among the top 21% of stocks with the strongest chances of outperforming market expectations. The Smart Score analyzes stocks based on factors extracted from eight unique datasets. (See Arrival Group stock analysis on TipRanks) Concluding Views Arrival seems well positioned to benefit from positive industry tailwinds. After the business combination, the company is well financed for expansion. Last month, the company announced its second U.S. micro-factory in Charlotte, North Carolina, and once production and delivery commence, the stock is likely to trend higher. Additionally, new orders for vans and buses are another potential trigger for stock upside. ARVL has corrected from listing highs of $24.90 to current levels of around $15, but current price levels could provide a good opportunity to accumulate stock. Disclosure: On the date of publication, Faisal Humayun did not have (either directly or indirectly) any positions in the securities mentioned in this article. Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.