UK-based startup Arrival announced Tuesday that it had selected a site in South Carolina for a "microfactory" to build electric buses.

The $46 million factory will be located in Rock Hill, South Carolina, and will create 240 jobs in the area, an Arrival press release said.

Arrival uses the term "microfactory" to describe small, decentralized facilities where it plans to build electric vehicles. The startup believes these smaller factories allow it to tailor production to specific regional needs, while boosting local economies through tax revenue and use of local labor pools and supply chains.

Use of a localized supply chain will also lower the overall environmental impact of vehicle production, Arrival said.

No specific reasons behind the decision to locate in South Carolina were disclosed, but the current state government has been friendly to automakers. Volvo and Mercedes-Benz recently opened factories near Charleston—the latter to build vans.

Arrival has shown its own stylish electric delivery vans, but the South Carolina factory will initially build buses, the company said. Arrival unveiled its electric bus earlier this year, saying at the time that it would be priced the same as a comparable diesel bus. Production at the South Carolina factory is scheduled to start in the fourth quarter of 2021.

Arrival electric delivery van for UPS

In February, Arrival also announced a deal to supply 10,000 electric delivery vans to UPS. Hyundai and Kia also announced a joint $110 million investment in the company in January.

Arrival will be vying for some of the same business won by Rivian, with its recently revealed vans designed for Amazon. Rivian is contracted to build 100,000 of the vans for the online retail giant by 2030 and, unlike Arrival, it also has plans for consumer vehicles. The Rivian R1T pickup truck and R1S SUV are scheduled to start production in 2021.