The company stated that it had been looking into various ways to fix the financial issue and alluded to future cost-cutting methods.
A company that makes electric vehicles, Arrival SA, said it might not have enough money to keep going next year. This made the company’s US-listed stocks go down by 33.2%. The startup said it had been exploring options to raise funds and might have to cut costs, which could significantly affect its UK workforce.
The Inflation Reduction Act, recently introduced by the Biden administration, provides companies with financial incentives. Hence, Arrival has decided to take advantage of this opportunity by “right-sizing” and focusing on the larger US market.
EV startups initially planned to change the automotive industry by unveiling new techniques and products. Unfortunately, they failed to keep costs down due to unforeseen issues with their supply chain and increased raw material prices.
John Wozniak, the chief financial officer of The Arrival, said that the company is actively engaged in capital raising and has had some preliminary discussions with a handful of parties for investment. He further said that given the current economy, the funding would take approximately six months to come through.
The company, which unfortunately incurred a more significant loss during the third quarter of this year, anticipates having enough cash to continue operations until 2023. Denis Sverdlov, the chief executive, said they would use some money on hand amounting to US$330 million and seek out new funding sources to achieve their goals in the United States.
In 2020, United Parcel Service placed an order for 10,000 electric vans from the company with the option to purchase an additional 10,000 units later.
The report said that the company’s net loss increased to $310.3 million in the third quarter, up from $30.6 million a year earlier.