British EV start-up Arrival SA has said it will lay off half its workforce as the company faces financial difficulties. It helps him to meet the operating costs, so he can survive in a competitive market. The move shows how EV startups are struggling in the automotive world, especially as car prices drop. Amid competition from the automakers, there are supply chain issues. A high increase in raw material prices is also not beneficial.
In addition, strong demand for electric vans is known to have brought out established players such as General Motors Brightdrop, Ford Motor Company and Rivian Automotive, while Tesla has cut the price of its EVs, increasing competition. It will become a publicly traded company in March 2021 after announcing last year that it was winding down its UK operations and joining a special purpose company, or SPAC, with the intention of refocusing its business in the US. In the year Founded in 2015, Arrival has been developing electric delivery vans for UPS as a customer, as well as ride-hailing vehicles for Uber and public buses. It has support from Hyundai and Kia.
The dismissal is bad news for the EV startup industry, where many startup companies have struggled to match Tesla’s success in bringing new vehicles to market. In addition to Reach, other companies that have cut headcount in recent months include Rivian, Nicola and Faraday Future. And the layoffs come amid broader economic concerns that have worsened across the tech sector.
The layoffs will reduce the company’s workforce to 800 employees. The company said it expects to cut its ongoing costs of operating the business in half to $30 million per quarter, accounting for reductions in real estate and other third-party costs. Advent said it currently has $205 million in cash on hand.
New CEO Torgov said in a statement: “The actions support our journey to become a champion of innovative products and new, more efficient vehicle manufacturing methods, especially in the US commercial electric vehicle market. “While these decisions are important, we are well aware that they will have a significant impact on our significant colleagues. We are 100% committed to supporting our employees through this difficult process.The company has been struggling for months with limited resources even though it plans to start mass production of its flagship electric van.
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