Thanks for your time today to discuss the business combination of Kensington and Arrival, which has developed a revolutionary electric vehicle serving the last mile delivery market. Arrival is at the forefront of the single greatest mega trend in transportation, electric mobility. The company is doing this by developing an innovative Class 4 delivery van that meets the needs of today's drivers, fleet operators, and delivery customers. While there are many companies making electric vehicles today, this is a next-generation delivery van that incorporates over 200 patents and $1 billion of capital. What gets us most excited about Arrival is that it has developed a completely new vehicle from the ground up that uses advanced materials and manufacturing technologies to increase functionality while reducing costs. The Kensington team has reviewed the results of Arrival, and we are impressed.
We also know through our success with leading EV suppliers such as QuantumScape, Amprius, and Wallbox, that making the future cleaner can be good business. It is why we are so excited about combining Arrival's vehicle and manufacturing technologies with our commercialization and public market experience. Let me explain the capital structure in the middle of this page. All net proceeds from this transaction will be retained by the business, including Kensington's cash held in trust and the existing cash on Arrival's balance sheet. This should result in approximately $468 million of pro forma cash for Arrival to accelerate their business, including the build-out of its new manufacturing facility in North Carolina. The business combination we're announcing today will result in KCGI shareholders receiving newly issued Arrival shares equal to $17 divided by Arrival's 10-day VWAP prior to the closing.
Arrival is expected to remain listed on Nasdaq. We believe this valuation compares favorably to other publicly traded EVs, especially given Arrival's significant accomplishments, which we will explain in this presentation. First, I would like to introduce the CEO of Arrival, Igor Torgov, and his impressive management team that have a clear vision to create significant shareholder value. With that, let me turn it over to Igor.
Thank you, Justin, for the introduction. We share our excitement around the transaction, which provides capital to support bringing our Class 4 XL Van to market. With our XL Van, we are revolutionizing the electric vehicle industry in this segment. Not only is the vehicle purpose-built and optimized for last mile delivery, but the design and manufacturing of the vehicle is done in-house by Arrival, eliminating the limitations coming from the use of standardized truck chassis and second-stage manufacturers. Before we tell you more about our revolutionary electric van, I would like to tell you a little bit more about who we are and what we have accomplished so far. What sets us apart are our product value proposition, design strategy, and capital efficiency. The XL Van is a purpose-built vehicle targeting the high-margin market of last mile delivery vehicles, which is currently underserved by large-scale OEMs in U.S.
The design of our van is modular for faster development and a higher degree of customization to meet our customer needs. We use in-house hardware components in key areas of our XL Van, which, combined with our proprietary software, result in a streamlined integration and fantastic user experiences. With this flexible and modular approach to design purpose-built vehicles, we bring products from concept to market in significantly less time and cost compared to traditional processes. Finally, through our flexible manufacturing method, we can produce vehicles with lower CapEx per vehicle and at lower break-even volumes in comparison to traditional OEM manufacturing methods. Today, I will be joined by John Wozniak, CFO, and Mike Ableson, CEO, North America and Automotive.
Thank you, Igor. As CFO, I bring over 25 years of experience in financial operations and public accounting, including extensive leadership experience from my 18-year tenure at Motorola Solutions. At Motorola, I most recently served as Corporate Vice President for Finance Operations and served for 8 years as its Chief Accounting Officer. I played a key role in Motorola's transition from a legacy $40 billion-plus revenue company to a more profitable and agile Motorola Solutions business. Mike?
Hi, I'm Mike. I've served as Chief Executive Officer of Arrival Automotive since October 2019. Prior to joining Arrival, I spent 35 years with General Motors in a number of positions, including Vice President of EV Infrastructure, Vice President of Global Strategy and Innovation, as well as Vice President of Engineering for GM Europe and a member of the management board of the German OEM, Opel. I'm also a member of the Executive Committee of the Transportation Research Board.
As for me, I joined Arrival in 2020 and served as Executive Vice President of multiple divisions within the company, including Fintech, Digital, and IT division. At the end of January this year, I was appointed Chief Executive Officer by our board following Peter Cuneo's brief assignment in the office. Prior to Arrival, I was active as CEO and in various other leadership positions at internationally renowned technology companies. Arrival key management team is completed by Daniel Chin, our General Counsel, Alex Park, who is responsible for Digital and IT, as well as Jakub Zielinski, our VP of Talent. We, as the senior management team, work very closely with our board, which is actively engaged in supporting Arrival's road to production. Our board of directors is led by our founder, Denis Sverdlov. The board brings a wealth of experience focused in the technology and automotive industries.
The Arrival team is complemented by Kensington's board and management team with deep experience in the automotive sector. The success Arrival has generated so far is largely due to our incredible talent. As a result of the recent cost optimization initiatives that we initiated in Q1 of this year, Arrival will have around 750 employees grouped into four key areas. Robotics and manufacturing focus on the development of our flexible manufacturing methods and software-defined factories. Our elements team is developing high and low voltage components and the integrated software used in our vehicles. The vehicle platforms team excels in the rapid design and development of all Arrival vehicles. They are currently heads down and laser-focused on developing our XL Van for the US market.
Last but not least, our digital and IT team is creating the software and other IT solutions to operate our business and provide digital services surrounding our vehicles. As a global company, our workforce is located primarily in four locations. In the US for the development and production of XL Van. R&D is done in our headquarters in London, UK. In Germany, our teams focus on robotics used in our factories. In Georgia, our key operations are focused on software engineering. Arrival, as it operates today, is solely focused on bringing the XL Van to production in Charlotte. It's also important to understand the outstanding achievements and milestones we have accomplished over the last several years, bringing a portfolio of IP and a small family of purpose-built vehicles to fruition, all with low investment relative to the industry.
After Denis founded the company in 2015, it took Arrival just three years to develop the first electric van prototype. Based on the accomplishments made until 2019, we received $100 million investment by the Korean OEM Hyundai and Kia. In 2021, while working on several different vehicle programs, our L Van entered the beta phase to verify our vehicle architecture and design. In the same year, the company listed on the Nasdaq through a SPAC with the CIIG, resulting in $650 million of capital to the business. While 2022 was a challenging year for us for a number of geopolitical and economic reasons, we managed to achieve EU certification for two products, including our L Van. In 2023, our focus is clear. We are going to supply a purpose-built last mile delivery vehicle to an underserved US market, our Class 4 XL Van.
I will now hand it over to Mike to take you a little bit deeper into our product development and competitive advantages in this space.
Thanks, Igor. Over the last several years, Arrival has developed a broad array of intellectual property in both the product and manufacturing areas. On the product side, we have 72 patents either granted or pending related to vehicle technology. Besides our vehicle-level patents, we also have 70 patents either granted or pending for components designed by Arrival. Arrival's IP on the product side is certainly valuable. However, as far as we know, Arrival is unique among recent EV startups in also developing manufacturing technology in-house. We have 51 patents granted or pending for robotics used in our manufacturing processes. Our AMRs, like the one shown in the lower left picture, are the most visible outcome of our work in this area. I'll describe the importance of the AMRs in a couple of slides. Finally, we have 21 patents either granted or pending for general manufacturing.
We believe that this portfolio of intellectual property gives Arrival a significant competitive advantage as compared to other EV manufacturers. Taking advantage of this internally developed IP, Arrival's first product is a Class 4 delivery van that we believe is well-positioned to compete in the US electrified van market. As shown in the slide, we believe the addressable market for the XL Van in the US alone is $5.4 billion. We also believe that the total global market for vans of all sizes is $280 billion, giving Arrival great future opportunities as we continue to develop products and deploy them in regions around the world. Importantly, and not included in the market sizes shown on the slide, Arrival intends to deploy vehicle-related software services which will provide additional opportunities for high margin growth.
Going back to the U.S., we see a number of tailwinds here that have led us to focus on the U.S. as our first market. We've designed the vehicle to expressly meet the needs of large logistics companies, many of whom have announced ESG goals, including specific initiatives to electrify their delivery fleet. Finally, the Inflation Reduction Act, signed into law last year, offers tax incentives for the purchase of Class 4 electric vehicles of up to $40,000 per vehicle. The attributes of this market segment, customers committed to electrifying their fleets, low volumes by traditional OEM standards, relatively low competition, high prices, and regulatory tailwinds represent a perfect opportunity for Arrival to deploy a custom-designed, high-margin product produced with our flexible manufacturing method. On this slide are further specifications for our XL Van.
It's a product that we've been working on since 2021. It's well along in development. The vehicle is custom-designed for use in the fast-growing last-mile delivery segment. Based on our discussions with customers, we think the specifications of this vehicle will fit with a wide variety of last-mile delivery tasks. Because the relatively low volumes in these segments aren't economically viable for traditional OEMs produced using assembly line processes, medium-duty vans are typically produced by second-stage manufacturers. These manufacturers purchase a chassis from a traditional OEM and then finish the vehicle by integrating the van box. This two-stage manufacturing process, besides being logistically complicated, is also relatively inefficient.
Although the volumes in this segment are typically too low to be addressed by traditional OEMs, these volumes are well-suited to Arrival's flexible manufacturing method, which allows us to manufacture the entire vehicle in our factory, avoiding the cost and complexity of the two-stage manufacturing process. In part because of the complexity involved in producing these vehicles with the two-stage process, the prices in this segment are relatively high, in excess of $100,000 per vehicle for zero-emission vans. However, beyond the physical specifications, the XL Van offers an array of features that benefit both the driver and the fleet operator. We've worked hard on the design of the vehicle to optimize the driver experience, from improving visibility to streamlining the way that information is presented on the central touchscreen.
Because almost all the software on the vehicle is written by Arrival, we have enormous flexibility in customizing the operation of the vehicle, whether that be how the doors operate and lock or even limiting maximum acceleration and speeds. The XL Van also features exterior panels of Arrival's proprietary and highly damage-resistant composite material. We also know that operating cost is one of the most important vehicle attributes in the eyes of our customers, and we've spent considerable effort to reduce the operating cost of the XL Van. Our vehicles have been designed from the start to be connected vehicles, and through a series of APIs, can interface with the customer's existing back-end systems, allowing the customer to gather data to improve the operating cost of their Arrival fleet. We will also offer over-the-air updates that can be used to further optimize the operation of the vehicle over its lifetime.
Importantly, the majority of these features, both hardware and software, were implemented in vehicles that have already been certified in Europe, and we continue to accumulate test mileage with those vehicles, thereby minimizing our development risk for the XL Vans. Even given all the innovative features on the XL Van, we're just as proud of the work we've done on the manufacturing process. The process in a traditional assembly plant is typically defined by the path of a mechanical conveyor. Every vehicle follows exactly the same path through the process at exactly the same speed. At Arrival, we've developed an autonomous mobile robot, shown in the center of this slide, that replaces the mechanical conveyor in our factory. This robot is truly autonomous, equipped with LiDARs and capable of motion in any direction. The path that the AMRs follow can be modified literally from one vehicle to the next.
In essence, we put the path of our conveyor under software control, which leads us to the idea of a software-defined factory. We do our body assembly in technology cells. These highly flexible assembly cells allow us to bring the benefits of automated assembly to production volumes that are much lower than a traditional assembly plant. Additionally, the technology cells have very little fixed tooling, meaning that they can be used to execute multiple stages of the assembly process. This, in turn, allows us to stage our capital investment. We can add cells to the factory as our volume ramps up. As with the vehicles, the capabilities of our factory are enabled by our software capability. Whether it be control of the AMRs or integration with the technology cells, our software allows us to bring this new manufacturing approach to life.
Our manufacturing method means that the buildings for our factories don't need to be purpose-designed. In fact, we can use readily available commercial buildings, thereby giving us an advantage in how quickly we can roll out a new factory. Our original facility at Bicester in the UK, building a small number of vans this year to allow us to further develop our technology cell processes, as well as further integrating our AMRs. The XL production facility will be in Charlotte, North Carolina, where we've already leased two adjacent buildings. We've used the lessons learned from our Bicester factory as we've developed the layout for Charlotte. This work is well along, and some of the equipment for Charlotte has already been purchased and delivered.
In summary, at Arrival, we've developed what we feel will be a high-margin, segment-leading vehicle that's assembled through a novel manufacturing method, a process that's designed to automate large parts of the vehicle assembly at volumes far below those of a traditional assembly plant. Now to speak to the use of proceeds from the transaction, I'll hand it over to John.
Thank you, Mike. We intend to use the proceeds of this transaction for vehicle program and production-related CapEx, working capital, and general corporate purposes. The vehicle program investment includes prototyping, testing, validation, and certification of the XL Van. Our production-related CapEx requirements include equipment and AMRs for the Charlotte Microfactory and the supplier tooling required for the production of the XL product. We have already purchased some equipment for Charlotte and expect to reuse a significant portion of equipment in Bicester for the Charlotte factory. In addition, our expected tooling investment will be lower than that from the L Van due to the significant level of reuse of components from that program, for which we have already made significant investment in tooling. We expect working capital to increase ahead of start of production in Charlotte to ensure we have enough parts to ramp production.
I will now hand the call over to Justin for the transaction overview.
Thanks, John. The proposed transaction is outlined on the following page. For the sources of capital, Kensington is contributing $283 million of cash held in trust, combined with Arrival's existing cash on their balance sheet, will result in approximately $468 million of pro forma cash for the company post-transaction costs. This will fund the commercialization plans you just heard about, most notably the new production facility in North Carolina. On the right side of the page, we've outlined the pro forma valuation and ownership structure. On the next page, I would like to provide a brief overview of the Kensington team. Our team has broad expertise and success in the automotive and industrial segments, with over 300 combined years in deploying billions in capital to create significant shareholder value.
Like we have done for past business combinations, Kensington has analyzed the universe of electric delivery vehicles and determined that Arrival is the best company in this segment. Additionally, Kensington has experience that will greatly enhance Arrival, including access to customers and suppliers, expertise in building and running vehicle manufacturing facilities, and public company leadership in managing and deploying capital. As you can see on the final slide, Arrival fulfills all of Kensington's investment objectives. It is for this reason that we are so impressed with Arrival and excited to facilitate a business combination with this important company, one that will become the market leader in electric Class 4 delivery vans, and one that will make everyone's lives better today and for generations to come. Thank you.