Arrival Pauses Electric Car and Bus Production to Give Way for Electric Delivery Vans

Arrival, a UK-based electric vehicle startup, will slash at least one-third of its costs facing dwindling cash flow to get its electric Van off the ground before returning to its all-electric Bus and Car production.

Introducing Arrival

Arrival ($ARVL) is an electric vehicle startup focusing on urban transportation. This includes an all-electric passenger Bus, a delivery Van, and a rideshare Car built in collaboration with Uber. The EV startup, though only been running for seven years, presently has offices in London and Charlotte, North Carolina, while their R&D and design are done in the United Kingdom. Arrival Van manufacturing will also begin in the UK, thanks to the company's innovative micro factory technique.

Why All-Electric Car and Bus Production Is On Pause

While Arrival's Q1 report said that Van and Bus manufacturing remained on pace for 2022, the startup, like many others, has had financial difficulties owing to a harsh global economic climate, including increasing interest rates and volatile stock markets.

The start-stock up's has constantly dropped since becoming public via SPAC merger in March 2021, prompting a statement in July that it would be restructuring its operations to focus on Arrival Van manufacturing.

Arrival stated in a statement to Electrek that it has offered solutions that include a reorganization of the company that would allow it to achieve business goals until late 2023, principally using the $500M cash on hand. Arrival's plan involves a targeted 30 percent decrease in cost across the firm, with the possibility of affecting up to 30 percent of staff internationally.

With roughly one-third of its 2,700 global employees potentially facing layoffs, sources from the company say Arrival's two EVs slated to precede the Van will also be laid off, at least for the time being.

As reported in a recent Financial Times story, the growth of Arrival's Bus and Car would also be impacted by the company's corporate reorganization. Sources close to the situation admit that the Arrival Bus would be postponed, including UK testing with the potential first client, First Bus.

Moreover, their rideshare-focused Car, already in collaboration with Uber, will also be scrapped. Its concept was presented in late 2021, with trials set to begin this year. In the same report from Financial Times, the Car might continue development if the firm generates income. Arrival's hopes for this now rest largely with its Van.

Given some of the obstacles listed above, Arrival looks to be on target to deliver their flagship Van this quarter, which could offer a critical lifeline in cash flow, particularly with a massive UPS contract on the books.

In early 2020 alone, UPS hipped 10,000 electric delivery Vans from Arrival. That amount has subsequently been increased and will potentially drive their Van manufacturing in the UK.

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Written by Thea Felicity