Arrival shares hit the brakes as ‘microfactory’ rollout slowed amid focus on R&D

Arrival Group SA warned that production numbers of its first electric vans and buses will be “significantly lower” than expected next year as it focuses investment on developing other EV platforms rather than ramping up volume.

Reporting its third-quarter financial results, the Oxfordshire-based company said it has revised the roll-out plans for its ‘microfactories’ on both sides of the Atlantic and so the forecasts it had given at the time of its IPO in March “should no longer be relied upon”.

In pre-market trading on Tuesday, the shares are down 19% at $14.30 ahead of the opening bell.

Arrival said it has invested more in further developing its five platforms – van, large van, bus, bus for emerging markets and car – and to secure components and batteries for production.

This has led to the slower factory roll-out, with the result of hitting vehicle volumes and revenue in 2022.

With the current priorities for 2022 being on the bus and van programs, a combined US$125mln was invested in the period the first two microfactories, in Rock Hill, USA and Bicester, England. A third Microfactory in Charlotte, USA is expected to start production in the last quarter of 2022 and a fourth now moved back to 2023.

Bus and van public road trials are pencilled in for the first quarter of 2022, with each Microfactory starting on single shifts and revenue expected to be recognized from the second half of the year.

Still in the pre-revenue stage, the company confirmed an operating loss of US$53mln for the quarter ending September 30, up from US$23mln from the previous year.

However, pre-orders were up to 64,000 from 5,000 in the previous quarter.

Cash and cash equivalents stood at US$441mln at the end of September.

Story by ProactiveInvestors