Arrival, the British van startup that first came across our radar back in 2018, is shifting its focus on the back of years of considerable financial losses that have forced it into a second reverse merger.
While Arrival has been working with the likes of UPS and Uber on its electric vans, it recently decided to wind down operations in the UK and is now shifting focusing exclusively to the United States which it hopes will allow it to receive significant subsidies through the U.S. Inflation Reduction Act.
Following confirmation that it will merge with special-purpose acquisition company Kensington Capital Acquisition Corp, Arrival should get $283 million in fresh cash and will use it to develop a single model in the U.S. This will be a Class 4 delivery van that will be available with a subsidy worth as much as $40,000.
Read: Arrival’s Fully Electric Van For UPS Spied Testing In Germany
Speaking with Reuters, Arrival financial officer John Wozniak said the company plans to build its medium-duty van at a factory in Charlotte, North Carolina by late 2024. The company has managed to keep its deal with UPS intact after a series of production delays, three years after UPS ordered 10,000 delivery vans from it.
“We think that (Class 4) is a sweet spot where Arrival can make a lot of money,” Wozniak noted. “We looked across the competitive landscape, and from where you sit today, there’s a lot of room to run in that segment.”
Arrival claimed in its first reverse merger that it would deliver $14 billion of revenue in 2024, but during 2021-2022, it lost $2.3 billion. It promptly cut 75% of its employees and as recently as November, said it would run out of money before the end of 2023 if it didn’t find new investors.
Reuters notes that the Class 4 van segment in the U.S. is quite small with annual sales typically around 30,000 to 40,000. This means Arrival has few competitors, giving it the best chance of survival.
