Executives with struggling electric vehicle manufacturer Arrival have secured an equity financing line they say will be “a backstop” as they look to raise $500 million to start production of a Class 4 delivery van for the U.S. market.
Word of Arrival’s share purchase agreement with New York-based investment firm Westwood Capital Group provides for the latter to periodically buy shares up to a total of $300 million, which is more than double Arrival’s current market value. But speaking to analysts and investors on March 13, CFO John Wozniak said the Arrival team is taking “a very conservative view” of how much it will lean on Westwood.
Sign up: FleetOwner's new Emissions & Efficiency newsletterOn the production side, the Arrival team is focused on the company's L Van, which is being built at its England factory and is smaller than the one leaders hope to build in Charlotte starting late next year. That XL Van would focus on the U.S. last-mile market segment but will be similar to the L model in its design and construction process. The Arrival team plans to build and test 10 L vans this year as a platform to further develop the XL, which is expected to sell for more than $100,000.
Contingent on that development is more successful capital raising for Arrival, which has heavily pruned its ambitions in the past year, stopping work on its buses and slashing production and sales targets while turning over a portion of its C-suite. Of the $500 million total needed to launch production in Charlotte by the end of next year, Wozniak said about $200 million will be needed for prototyping, finishing the company’s plant, and investing in hard tooling. He added that Arrival needs to raise between $100 million and $150 million this year to keep the XL program on track.
For more on this story, visit FleetOwner affiliate IndustryWeek.
