Arrival, the British electric vehicle (EV) developer, has received a $300 million injection from Westwood Capital, a move that could potentially give the company a lifeline to pull through the year.
The funding comes with certain conditions, however, including a requirement for Arrival to lower its targeted cash spend to no more than $35 million per quarter. The company expects this move to significantly reduce the amount of investment needed to fund the business this year.
Arrival’s CEO Igor Torgov, who was appointed in January, sees the funding as a crucial step for the company, saying that it has taken “important steps to help us take advantage of this opportunity, including raising additional capital as well as placing a sharper focus on the key US market and driving significant efficiency improvements.”
To achieve its target quarterly burn rate of $35 million, Arrival has already implemented several cost-saving measures, including laying off half its staff. The company plans to reduce its headcount to less than 800 employees by the end of March 2023.
In addition to cost-saving measures, Arrival has also agreed to build ten vans in the Bicester micro-factory to further develop the automated factory processes and integrate them with the company’s autonomous mobile robots. These vans will also be used to accumulate 250,000 kms of public road mileage to validate Arrival’s engineering designs and components by the end of 2023.
However, the XL Van designed specifically for the US market is not part of the agreement, as it will require a dedicated capital raise to fund production in the Charlotte factory. Start of production in Charlotte is targeted for late 2024, and the company expects the larger vehicle to attract higher average selling prices, margins, and tax credits than the L Van. Arrival is currently seeking backers to fund the program.
Despite the challenges, Arrival remains positive about its future. With available capital resources and additional initiatives to reduce working capital, the company expects to have sufficient liquidity to fund the business into late 2023 without the investments required for XL production.