Commercial electric vehicle manufacturer Arrival is reorganising for the second time in six months to make the most of its limited resources.
Thursday, the company announced in a regulatory filing that it would be shifting its focus from the United Kingdom market, where its headquarters are located and where the first electric vans were scheduled for delivery.
As a result of a SPAC merger, Arrival went from being a stealthy electric vehicle startup to a publicly traded company. The company has since announced that it will focus most of its remaining resources on developing a “family of van products” for the American market. Investments will be made in “core components,” “composite materials,” “mobile robotics,” and “software-defined factories,” among other technologies.
There will be widespread hardship as a result of this decision, particularly in the form of layoffs. After ending the third quarter with a cash runway of 330 million, the company announced plans to “right-size the organisation and cut cash intensive activities” to further increase its cash runway.
However, the company did not reveal an exact number of positions that would be eliminated. The tone of the company’s regulatory filing indicates that this is a major development. According to Arrival, “a significant impact on the company’s global workforce, primarily in the UK,” is anticipated as a result of the restructuring.
On its third-quarter earnings call on November 8, the company said it would provide additional details.
For the U.S. commercialization of these vehicle programmes, Arrival also plans to “explore all funding and strategic opportunities” to bring the country-specific vans into production at the company’s second microfactory in Charlotte, North Carolina.
To begin with, Arrival isn’t leaving the United Kingdom. The company has announced it will keep producing some vans at its Bicester microfactory to facilitate customer trials.
Recently announced as part of the Inflation Reduction Act, the tax credit is expected to offer between 7,500 and 40,000 for commercial vehicles, making the United States a very attractive development target for the company.
In June, Arrival announced it would reduce expenses and potentially lay off 30% of its workforce in an effort to weather the current economic climate while maintaining production levels. Arrival claimed at the time that its cash reserves of 513 million would be sufficient to see it through to late 2023.
Arrival has scaled back its planned vehicle deliveries from 400 to 20, and the company has put off developing its battery-electric buses in favour of concentrating on vans.
It appears that the previous cost-cutting measures were insufficient.
To meet its goals of delivering the first vehicles to UK customers this year, investing in hard tooling, and launching the Charlotte microfactory in 2019, Arrival had planned to use the 513 million in cash on hand, plus funds available through a 300 million “At the Market Platform.” A combination of the ATM’s unreliability and the company’s low share price (which closed today at 0.72) contributed to the stock’s poor performance.