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Arrival (ARVL) to reportedly shelve Bus and Uber Car to cut costs and prioritize Van deliveries

Recent news out of London affirms previous statements from UK-based EV start-up Arrival – which has said it plans to cut at least one-third of its costs amid waning cash flow in order to get production of its electric Van over the starting line. The company aims to begin generating revenue off the Arrival Van before circling back to the development of its two other electric vehicles, the Bus and Car.

Arrival ($ARVL) is a seven-year-old EV start-up focused on urban-centric mobility, including an all-electric passenger Bus, a delivery Van, and a rideshare-specific Car designed alongside Uber.

The company currently has headquarters in both London and Charlotte, North Carolina, but all of its R&D and design currently take place in the UK. That’s also where Arrival Van production will begin via the company’s unique micro factory approach.

Although Arrival’s Q1 report said Van and Bus production remained on track for 2022, the start-up, like many, has been met with financial woes due to a challenging economic environment around the globe, with rising interest rates and wavering stock markets.

Since going public via SPAC merger in March of 2021, the start-up’s stock has consistently fallen, leading to an announcement in July that it would be reorganizing its business to focus on Arrival Van production. Here’s the company’s statement at the time:

Arrival has proposed plans that include a realignment of the organization that would enable it to deliver business priorities until late 2023 primarily utilizing the $500M cash on hand. Arrival’s proposal includes a targeted 30% reduction in spend across the organization and anticipates that it could potentially impact up to 30% of employees globally.

With nearly one-third of its 2,700 member staff around the globe potentially facing the chopping block, sources close to the start-up state that Arrival’s two EVs set to follow the Van will also be let go… at least for the immediate future.

Arrival Van
The Arrival Car and Bus / Source: Arrival

Arrival pauses Bus and Car to build Vans and generate revenue

According to a recent report from the Financial Times, the development of Arrival’s Bus and Car will also fall victim to the company’s business restructuring. According to the report, people close to the matter say the Arrival Bus will be put on hold, including UK trials with prospective first customer, First Bus.

Additionally, Arrival’s rideshare-focused Car, which was being codeveloped with Uber, will also be shelved. Its prototype was unveiled in late 2021 and was supposed to begin trials sometime this year. According to one of FT’s sources, the Car could resume development once the company begins generating revenue. Arrival’s hope for that to happen will now fall solely on its Van.

Despite some of the hurdles mentioned above, Arrival appears on track to deliver its flagship Van this coming quarter, which should provide a vital lifeline in cash flow, especially with a whale-like UPS order in its book.

UPS initially ordered 10,000 electric delivery Vans from Arrival back in early 2020, and that number has since doubled and will be the main focus of the start-up’s initial Van production in the UK. Producing and delivering will be crucial in not only getting Arrival beyond Van production but also to help bolster its deflated stock as well.

We reached out to Arrival, but they are unable to comment at this time due to the proximity of its Q2 report going out on August 11. We are sure to learn more concrete details of this production pivot at that time.

Electrek’s take

FT’s report feels a little apocalyptic to me. It’s not unfair to say that Arrival has had a tough go of it in the market following its SPAC merger, but it’s more of a symptom of that cooling fad than the company’s performance.

That being said, if you’re not generating any revenue during tough economical times, not many investors are going to stop and throw some coin in your cup. I prefer to hear this news from Arrival directly though, so there’s not much to say until August 11.

I will, however, say that I don’t see anything particularly scary about Arrival putting a pin in two of its EVs to put its head down and get an actual product (the Van) into series production. According to its investor report from Q1, 96% of its nonbinding LOI orders were for Vans anyway.

What’s the point of continuing to develop the Bus and Car if it sinks the entire company (including the Van) in the process? Cut weight and circle back when your pockets are full.

Perhaps it stretched itself too thin trying to simultaneously build three EVs and manufacture them in two different countries, but Arrival appears to be pivoting. I just hope the employee collateral can be minimized.

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Scooter Doll is a writer, designer and tech enthusiast born in Chicago and based on the West Coast. When he’s not offering the latest tech how tos or insights, he’s probably watching Chicago sports.
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