Troubled British electric van start-up Arrival is in talks with EY about recruiting an administrator, if the company cannot secure rescue funding, according to reports.
The start-up, which is listed on New York’s Nasdaq, is struggling to raise long-term funding and is now preparing for possible insolvency, having entered talks with EY about appointing an administrator, should it fail to raise the necessary funds to carry on, Sky News claims.
The report added that City sources cautioned that there still remains a chance that Arrival will secure enough money to prevent it falling into administration.
In its heyday, Arrival had backing from the likes of UPS, which saw the delivery giant invest in the start-up in 2020 and order 10,000 Generation 2 Electric Vehicles. Royal Mail also signed up for a trial run of its electric van and hailed the EVs as “worth the wait.”.
However the manufacturer started to show signs of strain in January last year when it announced it was cutting 800 jobs globally, as it shifted its focus to the US market. At the time Arrival employed around 250 staff at its factories in Banbury and Bicester. The rest of its 1,600 workforce was located in the US, Germany, Russia and Israel. It is unclear how many Arrival jobs in the UK were cut.
The move to expand its operations in the US was aimed at taking advantage of Joe Biden’s Inflation Reduction Act (IRA) which is offering $369bn in subsidies and tax credits for companies investing in electric vehicles and renewable energy technologies that are manufactured in the US.
Arrival said at the time that it was refocusing its resources on the development of its US van product, with production expected to start in the US in 2024, subject to raising additional capital.
However the company’s ambitions in the US appear to have stalled. In November it warned that it might not have enough cash to keep its business going toward the end of 2024, which saw its shares tumble by 33.2%. The company pointed to possible cost cuts that could see jobs lost at its UK operations.
Arrival also revealed in November last year that it was under the threat of being delisted from Nasdaq due to delays in filing financial statements and failing to hold an annual meeting of shareholders.
Earlier this month, the company said it had received a further notice from Nasdaq warning that it was not in compliance with the listing rules. It is scheduled to go before Nasdaq’s Hearings Panel on 8 February.
A request by MT for a comment from Arrival has yet to receive a response.
