Shares of electric vehicle manufacturer Arrival lost a quarter of their value Aug. 11 after its executives said they are putting on ice their bus program and delaying plans to begin vehicle production to focus on building delivery vans at their United Kingdom plant.
Arrival’s leaders also sharply cut their 2022 delivery estimates to 20 units from their previous forecasts of 400 to 600 and said that, given those vehicles’ expected deliveries late in the year during UPS’ busy holiday season, they don’t expect to be paid for those until in early 2023. (UPS committed to buying 10,000 vans in early 2020, when the shipping giant's venture capital arm also invested in Arrival.)
On a conference call with analysts, CEO Denis Sverdlov said the call “to focus on operating the business in a downscaled manner through at least 2023” was made to help the company deal with rising costs and ongoing supply chain problems as well as make its cash last longer. The retreat from earlier plans–which also includes delaying investments in hard tooling for its vans–will trim Arrival’s 2022 capital spending in the second half to a range of $40 million and $60 million. The company spent nearly $200 million in the first six months of the year, in line with its leaders' upbeat forecasts from late winter.
“We are focusing on one microfactory and one product running on one shift, which will be a critical enabler to our initial ramp, cost and quality of production,” President Avinash Rugoobur said on the call.
For more on Arrival’s Q2 and capital plans, visit our sister site FleetOwner.