Is Arrival about to exit? Bicester based EV manufacturer warns about its future

By Nicky Godding

9 November 2022

Share

The Business Magazine article image for: Is Arrival about to exit? Bicester based EV manufacturer warns about its future

Commercial EV start-up Arrival's future is in doubt after it revealed that "2022 has been a challenging year", but its its valuable IP "developed through an impressive stack of in-house technologies gives us a unique advantage in developing electric vehicles and adapting to new market conditions quickly."

The company is now planning to take its composite materials, components, vehicle software, autonomous mobile robotics and microfactory concept to the US market, which it sees as the most attractive opportunity after the tax credits offered under the IRA became effective.

The company said it will continue to build a small number of vans in Bicester, which has already see a raft of redundancies, but warns that its new focus will mean that the workforce in Oxfordshire will be culled even further.

However, even with its new plans to look Stateside, Arrival said that as of September 30, 2022, it only had existing cash and cash equivalents of approximately $330 million – not sufficient to cover twelve months of operations.

Arrival said it cannot make margin on the current L Van product given the high cost of parts associated with being on low-volume (or “soft”) tooling, and lack of funds to finance hard tooling – and it is finding it hard to raise the capital necessary.

The US market, with the recent introduction of the Inflation Reduction Act tax credits offering up to $40,000 for commercial electric vehicles, the large market size, plus the anticipated higher margins for commercial vehicles, has now become the most attractive market for Arrival and the company says it will restructure the business to make it more financially attractive to investors.

Arrival posted losses for the third quarter of $310.3 million, compared to a loss for the period of $30.6 million in the third quarter of 2021. This loss in Q3 2022 includes non-cash impairment charges and write-offs of $232 million.

The Board said that "the company does not currently have cash on hand to fund operations for the coming twelve months and that material uncertainties about going concern remain after consideration of these mitigating actions.

"The Board further considered that the company is exploring all funding and strategic opportunities to obtain this necessary funding."

Arrival’s mission is to build its electric vehicles in it new concept of micro factories around the world, making them closer to their markets.

By Nicky Godding

Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe.

After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts.

She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.