EV start-up Arrival to cut UK jobs in production shift to US

Hundreds of UK jobs are at risk after struggling electric start-up Arrival announced it would relocate van production from Bicester to the US and make a “sizeable” reduction in its predominantly UK-based workforce. 

It is the second wave of savings the company has been forced to make in the space of three months, after it cut 800 jobs in the summer and announced the cancellation of its car and bus projects, in order to focus on its electric delivery van. 

On Thursday, the London-based company said it has not been able to tap its expected financial reserves due to the collapse of its share price, meaning that it has to take new measures to preserve its cash pile that stood at $330mn at the end of September.

The company had around 1,900 staff remaining after the summer jobs cut. It did not say how many would be affected, but said its latest cuts would “have a sizeable impact on the company’s global workforce, predominantly in the UK”.

Its Bicester site, the company’s first planned “microfactory”, requires “significant further investment” to begin mass production, and “the company has determined the benefits of such an investment would be best directed at the US market”.

It has an order from UPS for 10,000 electric vans, which it initially expected to meet by shipping them from the UK while bringing a US factory online.

The company now needs to raise additional funds to help develop its planned factory in Charlotte, North Carolina, it said. The business is “exploring all funding and strategic opportunities”. 

The decision is potentially the first UK impact of the US Inflation Reduction Act, which incentivises manufacturers to locate battery vehicle production in North America.

Arrival will “focus resources on a family of van products for the US market”, and will only use the Bicester site for some early subscale manufacturing, it said. Last month, the company announced it manufactured the first van at the site, saying it proves that its “microfactory” concept works.

Arrival was backed by Hyundai and BlackRock in 2020 at a €3bn valuation, but has seen its value drop to just $480mn.

Shares rose 6 per cent following the announcement about the US relocation. The stock, listed through merging with a special purpose acquisition company, has fallen by more than 90 per cent since floating last March.

The decision is the latest blow to the UK car industry as it tries to attract electric vehicle investment, after BMW confirmed it would cease making the electric version of the Mini at its Oxford plant next year, and battery start-up Britishvolt entered into emergency talks to sell the company or raise funding.