Shares of ambitious electric van and bus maker Arrival tumbled more than a third Nov. 8 after its executives followed up their recent announcement of spending and job cuts by saying the company won’t book any revenues in 2023 as it finishes development of its XL delivery van for the U.S. market.
Arrival’s leaders late last month said they are shifting their production focus to Charlotte from the United Kingdom to try to take advantage of strong U.S. demand for electric vans and the Inflation Reduction Act’s incentives for purchases of those vehicles. While reporting the company’s third-quarter’s net loss of $310 million, they added that they have enough cash to fund their plans through next fall but still urgently need to raise capital.
“Limited resources and the attractive opportunities in the U.S. market makes developing U.S. products the best use of capital,” CFO John Wozniak said on a conference call with analysts. “But this means revenue and margins will come later, not in 2023.”
Arrival, which went public via a special-purpose acquisition company in March 2021 with promises of billions in revenues by next year, finished Sept. 30 with about $330 million in cash on its books. About $75 million in restructuring costs—nearly half of that number related to the laying off of about 700 people—will force that number to shrink to between $160 million and $200 million at year’s end, Wozniak said, and the company’s cash burn should then settle in at about $60 million per quarter as it builds out its North Carolina plant.
The Arrival team is scouting for both strategic and financial partners as it seeks to extend its life span beyond the third quarter of next year. But Wozniak noted that, given the dodgy state of financial markets today, the process could take up to six months, leaving little wiggle room for delays.
Arrival’s stock (Ticker: ARVL) finished Nov. 8's trading session at about 38 cents versus their previous close of more than 59 cents. Over the past six months, the shares have slid from more than $1.50; a year ago, they were trading above $13 apiece.
This story was first published at our sister brand FleetOwner.