EV startup Arrival raises going-concern risk, warns of job cuts in UK

EV startup Arrival raises going-concern risk, warns of job cuts in UK

Automotive News Europe — 2022-11-08

Automotive Industry

Electric-vehicle startup Arrival warned on Tuesday 8 November that it may not have enough cash to keep its business going toward the end of 2023.

The company said it has been exploring options to tackle the fund crunch and hinted at cost-cuts that could have a sizeable impact on its workforce in the UK.

Arrival's move to "right-size" also comes as it shifts focus to the larger US market, with an eye on incentives from the Inflation Reduction Act.

EV startups that promised to disrupt the automotive industry with novel manufacturing techniques and products are scrambling to keep a lid on costs due to supply-chain issues and rising raw material prices.

"We're actively engaged in capital raising ... we've had some preliminary discussions with a handful of parties," Chief Financial Officer John Wozniak said in a post-earnings call.

"It would take about six months for funding to materialize given the macroeconomic environment", he said.

The company, which posted a bigger third-quarter loss, expects to have enough cash to fund the business into the Q3 of 2023.

"We will use cash on hand of $330m and look to secure new funds to achieve our goals in the US" said CE Denis Sverdlov.

In 2020, the company received an order for 10,000 electric vans from United Parcel Service, with the option for an additional order of 10,000 units.

Arrival's net loss widened to $310.3m in the Q3 from $30.6m in 2021.

The company's US-listed shares were trading at an all-time low of $0.36.