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The UK-based commercial EV startup has reached a publicly traded company, down from 400 vehicles to 20. It will postpone development of battery electric buses and allow Gear to focus on vans.
The company, which reported a widening second-quarter loss on Thursday, said it does not expect to break even in 2022.
“We’re changing the mode from two products, two shifts and two microfactories to one factory, one shift, one product,” CEO Dennis Sverdlov said on a call with analysts. “We believe this opportunity to change will give us a better chance to succeed.”
Sverdlov’s comments were confirmed by a Financial Times report last week, citing unnamed sources, that the company plans to shelve its electric bus and an electric vehicle developed in partnership with Uber and focus on vans. Arrival showed the first prototype for a ride on purpose-built electric vehicle at the TechCrunch event in May 2022.
The company said that the “destination car” is no longer the leading vehicle, and most of the management and engineering time is spent on the van. “The car is part of our long-term vision and will join the van and the bus to provide the multi-modal zero-emission transport ecosystem that cities need to meet their sustainability goals in the coming years,” said a company spokesperson. In a statement sent by email.
For the second quarter, it posted a loss of $89.6 million, compared to a loss of $56.2 million in the second quarter of 2021, and an adjusted EBITDA loss of $76.2 million, compared to a loss of $41.2 million in the same period last year.
The company has faced several delays since going public in March 2021 following a $660 million SPAC deal with CIIG Merger. The production delays sparked a class-action lawsuit against the company, which now plans to open its Charlotte, North Carolina plant next year.
Arrival is initially expected to deliver 400 to 600 vehicles by 2022.
“First of all, we want to make a lot of changes to push volumes at the end of the year,” Svedlov said. “We’ve made a strategic decision to spend cash, be more cautious and focus on delivering the first vehicles in perfect condition to our customers and then exit from that point.”
Last month, Arrival revealed plans to cut costs and cut up to 30% of its workforce in an effort to protect the business from a tough economic environment while meeting production targets. The plan is designed to help the company use $500 million in cash at the end of 2023 to meet its target, the company said at the time.
Advent ended the second quarter with $513 million in cash and cash equivalents and said it had begun restructuring its business to cut costs. The company also plans to raise $300 million in IPO.
Updated with destination feedback.
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