Arrival, a British company that hopes to begin production of its van in the United States by the end of 2024, received a $300 million equity financing line from Westwood Capital on Monday. Arrival also stated that it wants to reduce the rate at which it burns cash.
Over the past few months, EV companies have been experiencing a cash crunch due to rising inflation and high costs associated with production ramp-ups.
As layoffs and other cost-cutting measures take effect, Arrival expects to achieve its quarterly cash burn rate of $35 million by the second half of 2023. The company had approximately $205 million in cash and cash equivalents at the end of 2022.
These developments follow Arrival’s warning from last year that it might not have enough cash by the end of 2023 to keep its business going. It announced that half of its employees would be laid off in January and appointed Igor Torgov as its CEO.
In order to take advantage of the Inflation Reduction Act’s incentives to encourage the production and use of electric vehicles, Arrival also shifted its focus to the United States at the end of last year.
As a result of the high demand for electric vans, both established automakers like Ford Motor Company and General Motors’ BrightDrop and newcomers like Rivian Automotive have entered the market.
Arrival stated that the additional capital will fund the business until late 2023 and will give the company access to additional liquidity.
The company stated that it was beginning fundraising efforts to fund the U.S. production plan, but the raised capital will not cover investments in the van’s production in its Charlotte, North Carolina facility.
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