Oct 20 (Reuters) – Arrival SA said on Thursday it would restructure its business to focus on the U.S. market, seeking to take advantage of the stimulus provided by the Anti-Inflation Act and a larger addressable market where electric car startups are seeking to draw from cost.
The British company will continue to produce some vans at its plant in Bicester, UK, but said the large-scale investment would require a significant investment, so it would focus on the US market.
The Inflation Reduction Act is expected to result in $7,500 to $40,000 in commercial vehicle tax credits.
Arrival’s US shares rose 5.1% to 74 cents after the company said it plans to further “straighten up” the organization and reduce cash-intensive operations, which could have a “significant impact” on its global workforce, mainly in the UK.
Arrival, which has lost almost 90% in its share valuation so far this year, said in July that the restructuring could lead to up to a 30% reduction in its workforce. Read more
It ended the second quarter with about $513 million in cash and cash equivalents and in August launched an IPO worth about $300 million to raise funds.
In 2020, the company received an order for 10,000 electric vehicles from United Parcel Service ( UPS.N ), with an option for an additional order of 10,000 units.
EV startups that promised to disrupt the auto industry are now trying to keep a lid on costs amid supply chain problems and rising raw material prices.
Reporting by Savyata Mishra and Akash Sriram in Bengaluru; Editing by Vinay Dwivedi
Our standards: Thomson Reuters Trust Principles.