British EV startup Arrival forced into administration just years after spectacular stock debut

British commercial electric vehicle (EV) startup Arrival has been forced into administration following a tumultuous 12 months which most recently saw the company’s shares pulled from the Nasdaq stock exchange.

Since its formation in 2015, Arrival has experienced the highest of highs and now plumbs the lowest of lows.

Arrival set the record in 2021 for the biggest initial stock market listing of all time by a UK company when it secured a valuation of $US13.6 billion on New York’s Nasdaq stock exchange, resulting in a $US660 million fund raise from the IPO designed to finance the production of its $US1.2 billion backlog of orders from delivery companies including DHL, UPS, and Royal Mail.

However, since then, things seem only to have gone downhill, as the company has failed to meet either its own expectations or those of shareholders and customers.

Despite having launched plans to deliver an electric bus as well as an electric passenger vehicle, Arrival burned through what cash it had and in early 2023 lined up a $US300 million lifeline to help it stay in business through to the end of 2023.

However, last month saw the Nasdaq stock exchange notify Arrival of its non-compliance with listing rules before being subsequently delisted by month’s end.

On February 5, Arrival announced in a regulatory filing that it’s UK division would enter administration, with Simon Edel, Alan Hudson, and Sam Woodward of EY-Parthenon’s Turnaround and Restructuring Strategy team appointed as joint administrators.

Arrival’s non-UK entities will “continues their activities as usual outside of the administration process” while the administrators explore “options for the sale of the business and assets of the Companies, including the electric vehicle platform, software, intellectual property and R&D assets, for the benefit of creditors.”

Once backed by Hyundai and UPS, Arrival had big plans for revolutionising the way electric vehicles are manufactured, with hopes to build as many as 1,000 “Microfactories” around the globe by 2026 which would be capable of producing 10,000 vans or 1,000 buses.

Separately, in early 2021, Arrival announced that it would partner with global ride-hailing giant Uber to design and develop an affordable electric vehicle (EV) purpose-built for ride-hailing drivers, which it expected would enter production in the third quarter of 2023.

Arrival secured $US118 million from funds managed by global investment giant BlackRock in late-2020 which were planned to be used to support the company’s expansions plans, including the launch of its recently announced first US micro-factory. A year later, Arrival announced plans to build a High Voltage Battery Module (HVBM) assembly plant in the United States which will supply its two ‘microfactories’ in North and South Carolina.

Its North Carolina Microfactory was supposed to be producing 10,000 XL Vans for UPS, but as of May 2023 – the last time the company filed a quarterly earnings report – the company was promising “production in 2024” for its XL Van.

Even as recently as early January, the company was testing the XL Van in “extreme environments and conditions”, having reportedly completed testing equivalent to 3.8 times around the Earth.