For the second time in under three years, distressed British EV manufacturer, Arrival has just canceled a merger agreement with another special purpose acquisition company (SPAC) - the Kensington Capital Acquisition Corporation.
Arrival went public in March 2021 through a merger with its first SPAC, CIIG Merger Group, in a whopping $5.4 billion deal, which was big, even for the current business environment bloated with startups.
Since then, Arrival has restructured the company three times, repeatedly delayed its production, changed market focus, spent millions of dollars in unreported expenditures, and had its shares plummet to 23% of its starting value in less than 36 months.
To stave off bankruptcy, the company announced in April that it will merge with another SPAC - this time with Kensington Capital Acquisition Corporation, valued at $524 million. Going for a second SPAC is not new nowadays. A handful of companies, including British company Wejo, have done it to raise cash.
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Not a Good Time for EV Startups
Some EV startups are also not doing so well. Nikola Corporation, a US EV battery manufacturer, is planning to liquidate the assets of newly-acquired Romeo Power. This move comes in the wake of clamoring from shareholders to raise capital in an otherwise cash-tight business environment.
The same can be said of Lordstown Motors, who filed for bankruptcy protection last week. On top of that, they are suing Foxconn on their $170 million deal that didn't go as planned.
Some Companies Are Thriving
Not all EV companies are having cash problems. Tesla recently reported its record number of deliveries and production of its different electric vehicles during the last quarter.
In its global report regarding its Q2 2023 performance, the company said it exceeded its previous quarter deliveries by as much as 10 percent.
Many experts in EV chargers are confident that Electrify America will start adopting Tesla's NACS chargers and will soon signal to everyone that a new standard is coming. Volvo has already announced it will use Tesla's charger, the first in the EU. These big companies seem to have swayed Elon Musk.
Rivian Automotive, a California-based company, reported producing 13,992 trucks and vans at their Illinois factory, well above the Wall Street forecast of about 11,000 vehicles. Rivian is still confident it can hit the 50,000 mark in production for 2023.
2023 Keeps Getting Worse for Arrival
In May, the UK-based Arrival reported being 37% behind in cash reserves and getting worse. It's gotten to the point that the company thinks it will run out of cash by the end of 2023.
The EV manufacturer has cut staff by almost 75% to mitigate the effects. Despite this, Arrival is moderately confident that they can start producing the medium-duty XL Van before 2024 ends.
Related Article: Electrify America is Also Adopting Tesla NACS Chargers by 2025-Will it be the Standard Soon?
