Electric vehicle company Arrival has secured a $300 million equity financing line from Westwood Capital to help it remain in business until late 2023. However, the company is seeking additional dedicated funds to develop its XL delivery vans for the US market and start production in Charlotte, North Carolina by 2024. Arrival is hoping to raise an additional $500 million, with $100 to $150 million raised by the end of this year to fund the XL program.
Arrival has been burning through cash at a startling rate and is seeking to tap into as little of Westwood’s funding as possible to avoid giving away too much equity. The additional liquidity, the promise of XL vans with potentially high margins and further cost-cutting measures will make Arrival an attractive target for investors this year.
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The company’s new CEO, Igor Torgov, has headed drastic cost-cutting measures, including a 50% reduction in staff that will leave Arrival with fewer than 800 employees by the end of March 2023. As part of Arrival’s new business plan, the company intends to lower its targeted cash spend to no more than $35 million per quarter.
Arrival has been focusing all of its efforts on its US product strategy since Q3 and has decided to pull away from production at its Bicester, UK microfactory, directing resources instead to the buildout of a microfactory in Charlotte. Arrival said the $500 million would help it invest in supplier production tooling and prototyping, complete procurement and installation of equipment and provide working capital to start production of XL vans in the US in late 2024.