The company wants to shift its focus to the United States despite being originally headquartered in the UK.
This is because Arrival hopes to receive federal funding due to its collaboration with Uber and UPS.
The company wants to operate in the Class 4 delivery van segment, where it might not have many competitors.
UK-based delivery van start-up Arrival has now decided to shift its focus from the UK to the United States, where it hopes to have more success.
Since the company has yet to produce its first vehicle, it has to deal with significant financial struggles that forced it to fire 75% of its employees last November.
In addition, Arrival said it would have to go into bankruptcy before the end of 2023 if it didn’t find any new investors, which it now seems to have done.
Indeed, the start-up will merge with a special-purpose acquisition company for the second time in order to receive a cash injection.
This new merger is expected to add $283 million to the company’s bottom line, which it will use to develop a single model aimed at the United States.
Arrival says this decision to abandon the UK market in favour of the United States is due to the Biden administration’s Inflation Reduction Act which makes it more profitable to sell electric vehicles in the US.
Arrival electric delivery van | Photo: Arrival
Indeed, qualifying electric vans could come with a subsidy of around $40,000, which would make them affordable enough for potential customers and profitable enough for the manufacturer.
Of course, Arrival will need to build these vans in North America in order to benefit from these preferential measures.
This is why the company is looking at a site in North Carolina where it could set up an assembly line for its upcoming van, which should arrive toward the end of next year.
With this single model, the start-up wants to target the Class 4 van segment, a category where it should have few competitors for at least a few years still.
Another factor that could help Arrival succeed in the US is that it already has an order for 10,000 vans from UPS and it is working with Uber, who could also order a large number of the upcoming van.
It will be interesting to see if the recent merger and the decision to focus on the US market will allow Arrival to become a key player in the electric delivery industry.
Source: Carscoops
