Electric vehicle maker Arrival is cutting jobs for the second time as it shifts its focus towards America and away from the UK.
In a regulatory filing published on Thursday, October 20, the company stated that it is shifting its focus to the United States and away from the UK market.
Arrival, which went from a stealthy electric vehicle startup to a publicly traded company via a SPAC merger, announced 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 and will mean 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, but the language used 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.”
The company said it will provide more information at its third-quarter earnings call on November 8.
Arrival also stated that it is “exploring all funding and strategic opportunities” in order to fund the commercialization of these vehicle programs in the United States.
This is required to begin production of the vans designed for the country at the company’s second microfactory in Charlotte, North Carolina.
Arrival will not be leaving the UK.
The company stated 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 was a major factor in the company’s decision to shift its focus to developing its U.S. business.
This is expected to offer between $7,500 and $40,000 for commercial vehicles, the large addressable market size, and substantially better margins.
Arrival announced in June that it would cut costs and lay off up to 30 percent of its workforce in an effort to protect the company from a challenging economic environment while meeting production targets.
Arrival stated at the time that the plan would allow the company to meet its targets through late 2023 using the $513 million in cash on hand.
Arrival reduced its delivery plans from 400 to 20 vehicles in August and postponed the development of its battery-electric buses to focus on vans.
Now it appears that those cuts were insufficient.
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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.