Saying they have been unable to reliably raise new capital through stock sales, the leaders of electric vehicle manufacturer Arrival are slashing their operations in the United Kingdom and focusing their energies and money on building vans for the U.S. market.
The strategy shift from Arrival comes just two months after CEO Denis Sverdlov and his team decimated their production guidance and said they had frozen work on their bus program to ramp up van production at the company’s plant in Bicester, England. Now, that facility will be hit with the lion’s share of job cuts the company described in a statement as “sizable” while adjusting to making a small number of vans, refining its processes and working with customers on trials.
The Arrival team is looking to its Charlotte microfactory to pick up the slack and bring to the U.S. market a range of delivery vans. Informing that decision, executives said, was the recent passage of the Inflation Reduction Act, which will offer tax credits of up to $40,000 for commercial vehicles.
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But the North Carolina plant still needs a lot of money to begin production, and Arrival has been burning through cash. After entering the third quarter with more than $510 million on hand, it finished September with about $330 million, and its leaders say they are “exploring all funding and strategic opportunities” to help them bring their vans to the U.S. market.
The latest dialing back of ambitions for Arrival reflects a broader trend in the EV market as financial markets have tightened, and companies haven’t been able to meet many of the aggressive targets they laid out in recent years. Experts say a broader rationalization looms as startups burn through their cash and find that investors are no longer willing to give them more. Case in point: Mullen Automotive Inc. received court approval Oct. 13 for its plan to pay $55 million for some Electric Last Mile Solutions Inc. assets and take on $37 million in liabilities.
Shares of Arrival (Ticker: ARVL) were changing hands Oct. 21 around 68 cents apiece, down 5% from their previous close. They have lost three-quarters of their value over the past six months, shrinking the company’s market capitalization to about $435 million.
