Arrival, the U.K.-based commercial EV startup turned publicly traded company, has lowered its delivery plans from 400 vehicles to 20 as it postpones development of its battery-electric buses and shifts gears to focus on vans.
The company, which reported Thursday widening losses for the second quarter, said it no longer expects to generate revenue in 2022.
“We are switching from the mode where we have two products, two shifts and two micro factories to the mode where it’s one factory, one shift, one product,” CEO Denis Sverdlov said during a call with analysts. “We believe that this opportunity to switch gives us better chances to be successful.”
Sverdlov’s comments confirm a Financial Times report last week citing unnamed sources that the company was shelving its electric bus and an electric vehicle designed in partnership with Uber and plans to focus on the van. Arrival revealed in May 2022 at a TechCrunch event the first prototype of its purpose-built electric vehicle for ride hailing.
For the second quarter, Arrival reported a loss of $89.6 million, compared with a loss of $56.2 million in the second quarter of 2021. The adjusted EBITDA loss for the period was $76.2 million, compared with a $41.2 million loss during the same period last year.
The company has faced several delays since going public in March 2021 through a $660 million SPAC deal with CIIG Merger. Production delays triggered a class-action lawsuit against the company, which now plans to open its Charlotte, North Carolina, factory next year.
Arrival had initially expected to deliver between 400 and 600 vehicles in 2022.
“Originally we wanted to make many shifts to push the volumes for the end of the year,” Svedlov said. “We decided that strategically it’s better for us to spend cash, be much more careful and focus on delivering first vehicles in perfect condition to our customers, and then scale from that point.”
Last month, Arrival signaled plans to slash costs and cut as much as 30% of its workforce in an effort to protect the business from a challenging economic environment while meeting its production targets. The plan was designed to allow the company to meet its targets through late 2023 using the $500 million of cash it has on hard, the company said at the time.
Arrival ended the second quarter with about $513 million of cash and cash equivalents and said it began restructuring the business to reduce costs. The company also is aiming to raise money through a $300 million at-the-market offering.