Future of UK electric van maker uncertain despite $300m funding injection

Arrival says it must raise more cash to realise its dream of building vehicles in the US next year

TROUBLED British electric van developer Arrival has said its future is still uncertain despite a $300m (£246m) lifeline to stave off imminent collapse.

Arrival, which was championed by Boris Johnson while he was prime minister, said the cash injection from New York-based Westwood Capital would keep it going until late into this year.

Under the terms of a complex deal, Westwood has agreed to buy shares in Arrival in a series of blocks so long as the stock price is above 10 cents. Each transaction will be done at a discount of up to 5pc to the market price at the time.

However, the business must still raise more cash to realise its dream of building vans in the US next year.

The need for more capital comes despite a cost-cutting plan. Arrival is slashing its workforce in half, leaving just 800 workers, in an effort to reduce its cash burn to $10m a month. The company said: “Despite mitigating factors taken to date, there remain material uncertainties about the company’s ability to continue as a going concern primarily due to the fact that further capital raises are required to fund the company to a break even point.”

Founded in 2015, Arrival had an ambitious plan to build a network of microfactories that would build lighttuesday weight commercial vehicles close to where they would be sold.

This process would strip out as much carbon from the process as possible and, it claimed, allow battery-powered vehicles to be built much more cheaply than the competition. The company won backing from Hyundai, Blackrock and Kia, and was included as one of Boris Johnson’s “green dozen” sustainable British champions in 2021.

However, Arrival has been stung by rising interest rates and by repeated delays to production. In September, the first van rolled off its assembly line in Bicester, Oxon, months later than planned. Weeks later, the company warned it could run out of cash within a year and began making staff redundant.

Earlier this month, it emerged that the company had been forced to fight off legal action by creditors. Two winding up petitions were withdrawn after Arrival paid its suppliers.

Arrival listed in New York two years ago, valued at $13bn but is now worth $110m. Shares fell 15pc yesterday.