This EV startup was going to revolutionize how cars were made – now, it’s on life support
Arrival’s last 15 months of promises and pivots
@harriblogs / 5:47 AM GMT+6:30•November 4, 2023
Arrival workers pose next to the company’s first microfactory-built van.
Image Credits: Arrival
Arrival set out eight years ago to make electric vehicle production “radically more efficient.” So far, its plan to forgo the gigafactory for local microfactories has proved anything but.
Arrival trumpeted how its automated microfactories would simultaneously churn out electric vans for UPS, cars for Uber drivers and buses for the U.K., Italy and California. The past 15 months provide a different story line. The company laid off workers four times, slashed production targets and dropped its Uber car and bus programs. It’s even struggling to meet Securities and Exchange Commission filing requirements. The company reported Friday in a regulatory filing that it missed another deadline to file its 2022 annual report, putting it out of compliance with the Nasdaq Exchange. If Arrival fails to appeal, Nasdaq will suspend trading of its ordinary shares November 9.
Arrival, which went public via a merger with a special purpose acquisition company in the high-flying meme stock days of 2021, appears to have little hope of realizing its goals.
Prior to its first SPAC, Arrival started life in stealth. Will it die the same way?
Arrival’s next earnings report could shed light on whatever gas it has left. Yet, since the company failed to share its September financial report, and hasn’t responded to TechCrunch’s requests for comment, we’ve rolled back the clock ourselves to put Arrival’s current state of limbo into context. Here’s how Arrival, a company that debuted on Nasdaq valued at $13 billion, has withered over the past 15 months to a market capitalization of just under $20 million.
Layoffs first hit Arrival in July 2022, when the company said it would slash its workforce by 30%. Arrival had 2,700 workers at the time across the U.K., EU and U.S., per the Financial Times. By that math, the company would lay off more than 800 people.
At the time, the Hyundai-, BlackRock- and UPS-backed startup was far from alone — Tesla and Rivian also announced significant layoffs around this time. Collectively, the automakers blamed a looming recession, rising interest rates, inflation, the pandemic, supply chain issues and so on, for the jobs they eliminated.
In August 2022, Arrival founder and CEO Denis Sverdlov looked back at the second quarter and noted “big achievements,” including EU certification for its van and bus, and “successful internal trials […] on public roads.” The CEO added that Arrival would produce EVs in its first microfactory in a matter of weeks — a moment he said would “fundamentally change the automotive industry.” Sverdlov also doubled down that Arrival would deliver its first vehicles to UPS that year, and kick off U.S. production in Charlotte, North Carolina in 2023.
The company would make good on at least one of those promises.
Arrival’s reported cash on hand was $513 million at the end of Q2 2022. The publicly traded firm said it would raise an additional $300 million from investors via an at-the-market stock offering based on its share price. For reference, Arrival opened on August 1 at $77 per share.
First microfactory van
By the end of September 2022, Arrival celebrated its first microfactory-built van. Reaching the milestone was “more difficult than we had initially imagined,” said Sverdlov. Tucked into the announcement was news that everything Arrival made in 2022 would “be used for continued testing, validation and quality control” — and not sold to customers.
Arrival initially said it would deliver 10,000 EVs to UPS “from 2020 to 2024.” The shift meant the company had just two years to reach that goal.
Arrivals big pivot to the U.S. came in October 2022, just one month later.