Arrival executives say the electric bus and van manufacturer is on pace to hit its 2022 target of producing 400 to 600 vans and continue to think the company’s price point will, despite inflation, sit comfortably below those of most of its EV peers.
The Arrival team expects to start production of vans at its Bicester, England, factory in the third quarter and in Charlotte, North Carolina, in the fourth quarter. Between now and then, the company will need to finish the remaining 30% of required van certification testing, which Founder and CEO Denis Sverdlov said is right on schedule. In the United Kingdom, the company has started phased trials for its bus and plans to also start production of those later this year.
“We really see 2022 as the year when we prove all our development and engineering specifications and other things,” Sverdlov said on a conference call with analysts and investors discussing first-quarter earnings. “And we see 2023 […] as the year when we start to produce in volumes and get to the right margins.”
Arrival finished March with about non-binding letters of intent and orders for 143,000 vehicles, up from 134,000 at the end of 2021. About three in four of those have come from buyers in the United States and 96% are for vans.
President Avinash Rugoobur said the sales team’s focus has shifted to converting LOIs to signed orders that can fill the company’s pipeline for next year and beyond. When it comes to pricing, CFO John Wozniak said a number of the company’s pre-orders haven’t nailed down a price yet, which will let Arrival absorb some of the impact of recent cost and supply chain pressures.
Arrival had a net loss of $10.4 million during the quarter and an adjusted EBITDA loss of $66.9 million, which was more than double the $31.1 million adjusted EBITDA loss from the first three months of 2021. The company’s capital spending doubled to $99.1 million during the quarter, which included $70 million for capitalized research and development costs and $25 million for its microfactories. Executives said they have enough capital to hit their production targets and finish 2022 with between $150 million and $250 million in cash.
Shares of Arrival (Ticker: ARVL) were up nearly 7% to $1.67 on the afternoon of May 10. Year to date, they have lost about 80% of their value, cutting the company’s market capitalization to about $1 billion.
