News

Arrival, the electric van company, is running out of money

arrival, the startup of electric vehicles, is going through some economic difficulties, as announced by the German Bank in a recent statement. Two years ago, the company presented its intention to market a new electric van with a minimalist design and high autonomy capabilities, especially suitable for last-mile delivery and distribution tasks. In fact, companies like UPS, DHL or Royal Mail put their eyes on her to provide him with a whole fleet of vehicles. Now this is up in the air due to recent statements by the German bank.

According to the German establishment, it should not have been enough for the company -economically speaking- the investment of 100 million dollars by hyundai, with which he acquired 2.57% of the company, or the enormous order carried out by UPS for 10,000 electric vans with an option for an additional 10,000 more. These bets boosted the confidence of everyone who set their sights on Arrival and Raised its stock market valuation to $13.6 billion. Currently, this valuation has fallen to 1,200 million, according to the price of the shares today.

Brand owner and CEO Denis Sverdlov continues to believe that his flexible micro-factory manufacturing model still has the potential to generate up to $100 million in annual gross profit from each of these unique factories. Berenberg Bank is positive about this company and continues to recommend the acquisition of its shares despite having lowered the estimates of the adequacy of the flexible microfactories, since the Arrival board of directors ensured at the beginning the start-up of 31 of them by the year 2025, while currently estimating a maximum of only seven.

Arrival develops, together with Uber, an electric car for transporting people
Arrival develops, together with Uber, an electric car for transporting people

On March 2, Arrival publicly confirmed that it had a total of 134,000 non-binding orders, among which is the one mentioned above by UPS. This represented a vital economic boost for the company, since in its filing with the SEC they claimed to have sufficient funds to execute their short-term business plan, which includes the marketing and production of their bus and their electric van throughout of the third quarter of this 2022. However, the company’s board also pointed out that, although its funds are optimal to start said production, these would remain scarce for its long-term business plans.

For this start of production, Arrival expects to invest around 75 million dollars on its plant based in Bicester, England, which they consider to be their particular testing laboratory to refine the concept of flexible microfactory. In this plant, complete priority will be given to the manufacture of the electric van, as this will be its key model with which to present its business model to the world.

Today, Arrival is developing an electric bus and an electric van with two body sizes, in both cases directly focused on strictly commercial use. Additionally, they are also working on an electric car together with Uber, which is scheduled to be launched in 2023. From Arrival they confirmed to Coach They hope to end the year 2022 with an economic amount of between 150 and 250 million dollars, which would be allocated almost entirely to the start of manufacturing and fine-tuning of their flexible microfactories.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button