| 29 May 2024, Wednesday |

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

Arrival SA, a startup for electric vehicles, warned on Tuesday that it might not have enough funds to sustain its company by the end of the year, sending its U.S.-listed shares down 33.2%.

The corporation stated that it has been looking into ways to deal with the financial crisis and made hints at cost-cutting measures that could materially affect its workers in the United Kingdom.

The decision by Arrival to “right-size” also coincides with a shift in emphasis toward the larger U.S. market and the incentives provided by 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 third quarter of next year.

“We will use cash on hand of $330 million and look to secure new funds to achieve our goals in the United States,” said Chief Executive 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 $310.3 million in the third quarter from $30.6 million a year earlier.

  • Reuters