Commercial electric vehicle startup Arrival is reportedly pausing development of its Bus and Car projects as it seeks to cut costs by a third and focus on putting its Van into production to generate revenues.
According to three people familiar with the matter cited by Financial Times, the London-based company is delaying trials of its Bus and pausing development work on its ride-hailing car project.
While the car project has been paused, it may be revived once the company has begun making money, one of the sources said. The Car programme was further behind the Bus or Van projects, having so far produced a prototype model. When Arrival unveiled the Car in November 2021, it said it would enter production in late 2023; the production start will most likely be delayed now.
The Bus project, which was further ahead and had received European certification in May, has also been paused while trials with potential customer First Bus have been pushed back. Both decisions will allow Arrival to focus on getting the Van into production, two of the people said.
Gallery: Arrival Car Prototype
The change of strategy is said to be linked to Arrival's recently announced plans to cut its workforce by up to a third in order to preserve its dwindling cash reserves. The company's main focus at the moment is to start producing its first electric van sometime this fall. Around 800 jobs are at risk across its business, out of a global headcount of 2,700.
Focusing on the van project seems the logical thing to do, as the delivery vehicle is the most advanced of the three projects and Arrival has up to 20,000 orders from UPS for it. The company expects to start deliveries of the Van in the third quarter of this year, helping the business generate its first revenues since it went public on Wall Street in March 2021 via a SPAC merger.
Earlier this year, Arrival said that its first US plant would open later than expected, adding that van deliveries would begin from its UK facility in Bicester, Oxfordshire. The company plans to use small scale "microfactories" for production, which will allow it to avoid the large investments required by a traditional car plant.
Arrival declined to comment on the report, but the company may confirm the decision on 11 August when it is due to release half-year earnings.