Cash shortfall looms for electric bus start-up after Nasdaq listing

A BRITISH electric bus company valued at $13bn (£11bn) in a stock market listing last year has warned it may run out of cash within the next 12 months.

Arrival, which listed on the Nasdaq in New York last March, said it only has enough money to last until the third quarter of next year.

The company, which hopes to make electric buses and vans, is trying to raise more cash and is slashing costs but the board said there was “material uncertainties about going concern”.

Shares fell by a third, valuing Arrival at $244m. The stock had already fallen by more than 90pc since its March 2021 listing that was carried out via a Spac deal, which raised more than $600m for the company.

The warning about the company’s dwindling cash pile came as it posted a $310m loss for the third quarter of the year, up 10-fold from the same period 12 months ago. It expects to end the year with between $160m and $200m in the bank.

Last month Arrival, which has a factory in Bicester, Oxforshire, said it would cut jobs and quit the UK for the US in order to capitalise on the large tax breaks available for electric vehicle producers under President Joe Biden’s green deal. Further cuts will have a “sizeable impact” on its UK workforce in Bicester, it said. It has already cut 800 jobs this year.

Arrival champions the idea of microfactories: small production centres that can be set up quickly and cheaply when compared to traditional factories. It claims these facilities would slash carbon emissions by building vans, buses and trucks close to customers.

UPS has ordered 10,000 of its vehicles and it has won investment from Blackrock and Hyundai.

Shares are now at 38 cents apiece. The company must improve this to above $1 or risk being delisted under Nasdaq trading rules.

The collapse in share price means Arrival is not in a position to raise the money needed for the large production runs required to make its vehicles profitable, the company said.

“We will continue to build a small number of vans in Bicester while advancing our composite materials, components, vehicle software, autonomous mobile robotics and microfactory to bring our products to the US market, which has become the most attractive opportunity for Arrival in the mid to long term,” said Denis Sverdlov, Arrival’s founder.

“We will use cash on hand of $330m and look to secure new funds to achieve our goals in the US.”