EV Maker Arrival Cutting Jobs Again In Pivot Away From UK To The US

Arrival had planned to use its existing cash on hand of $513 million, along with funds available through a $300 million "at the market platform" (ATM), to deliver the first vehicles to customers in the United Kingdom this year, invest in hard tooling, and launch the Charlotte microfactory the following year.

EV Maker Arrival Cutting Jobs Again In Pivot Away From UK To The US-ravzgadget
EV Maker Arrival Cutting Jobs Again In Pivot Away From UK To The US

Arrival, a commercial EV company, is restructuring its business for the second time in six months to make the most of its remaining capital.

In a regulatory filing published Thursday, the company stated that it is shifting its focus to the United States and away from the UK market, where it is headquartered and where the first EV vans were scheduled to be delivered.

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Arrival, which went from a stealthy electric vehicle startup to a publicly traded company via a SPAC merger, announced that it will now devote the majority of its remaining resources to developing a “family of van products” for the US market.

It will also invest in related technologies such as core components, composite materials, mobile robotics, and software-defined factories.

The move will result in significant pain for the company, specifically job cuts. The company stated that it intends to “right-size the organization and cut cash intensive activities” in order to extend its cash runway, which was $330 million at the end of the third quarter.

The company did not specify how many jobs it intends to eliminate. The language used by the company in its regulatory filing indicates that it will be significant.

According to Arrival, the restructuring is “expected to have a significant impact on the company’s global workforce, primarily in the UK.”

More information will be provided during the company’s third-quarter earnings call on November 8th.

Arrival also stated that it will seek additional capital to fund the commercialization of these vehicle programs in the United States, and that it is “exploring all funding and strategic opportunities” to bring the vans designed for the country into production at the company’s second microfactory in Charlotte, North Carolina.

Arrival does not mean leaving the UK. The company stated that it will continue to manufacture a small number of vans at its Bicester microfactory to support customer trials.

The tax credit recently announced as part of the Inflation Reduction Act — expected to offer between $7,500 and $40,000 for commercial vehicles — was a major factor in the company’s decision to shift its focus to developing its U.S. business, as was the large addressable market size and significantly better margins.

Arrival reduced its delivery plans from 400 to 20 vehicles in August and postponed development of its battery-electric buses to focus on vans.

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Arrival had planned to use its existing cash on hand of $513 million, along with funds available through a $300 million “at the market platform” (ATM), to deliver the first vehicles to customers in the United Kingdom this year, invest in hard tooling, and launch the Charlotte microfactory the following year.

However, the ATM was an unreliable source of capital due to the company’s low share price, which today closed at $0.72, and daily trading volumes.

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