Saturday, June 25, 2022
Cars

German bank reports EV firm Arrival running low on cash


The company’s $100m investment from Hyundai, which took a 2.57% stake in the company, and UPS, which placed a non-binding order for 10,000 vans with an option for a further 10,000, pushed the company’s stock market valuation to around $13.6 billion when it first listed. The company is now valued at $1.2bn, based on its current share price.

Arrival, started by entrepreneur and Russia’s former deputy minister for communications and mass media, Denis Sverdlov, claims its flexible and relatively cheap microfactory production concept can generate $100m in gross profit per factory annually.

Berenberg said it was modelling the completion of seven microfactories by 2025, compared with Arrival’s previous estimates that it would have 31 globally by that date.

Arrival said it had 134,000 non-binding orders and expressions of intent for its vehicles as of 2 March this year. Non-binding means there’s no obligation for those who made the order to go ahead.

Arrival said in the April SEC filing that it had “sufficient funds to execute its near-term business plan”, including starting production in the third quarter for both the bus and van. However, it “anticipates needing to raise additional capital to execute its long-term business plans”.

The start-up has said it plans to spend $75m this year on its Bicester plant, which it characterises as its “lab” microfactory, where it has prioritised starting production on time of the Arrival Van, its key model.

As well as the bus and two van sizes, Arrival is developing an electric car aimed at ride-hailing companies such as Uber with a launch target of 2023.

Arrival confirmed to Autocar that it expects to end the year with cash reserves of between $150m and $250m. However, it said that the flexible production methods in its microfactories will allow it to operate with a low balance sheet if needed.

“We have the ability to ramp up and down costs quite quickly should we choose to do so,” the company said in a statement. “We have a large addressable market and there are significant industry tailwinds.



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