(Adds details, management comments, context)
November 8 (Reuters) –
Electric vehicle startup Arrival SA warned on Tuesday that it may not have enough cash to continue operations into next year and said it would explore all options to deal with the funding crisis.
US-listed shares of the British company fell 13.7% to $0.51 in trading before the bell as it also reported a bigger loss in the third quarter.
Electric vehicle startups that have promised to disrupt the auto industry with new manufacturing techniques and products are scrambling to contain costs in the face of supply chain issues and rising raw material prices.
“We are actively engaged in raising capital…we’ve had preliminary discussions with a handful of parties,” Chief Financial Officer John Wozniak said on a post-earnings call. It would take about six months for the funding to materialize given the macroeconomic environment, he added.
Arrival said it will further “adjust the size” of the organization and go frugal in a move that could impact its workforce. He did not, however, provide details of the potential layoffs.
The company expects to have enough cash to fund the business through the third quarter of next year.
“We will use $330 million in cash and seek new funding to achieve our goals in the United States,” chief executive Denis Sverdlov said.
The British company said last month it would restructure to focus on the broader US market, taking into account the incentives of the Cut Inflation Act.
Arrival’s net loss widened to $310.3 million in the third quarter from $30.6 million a year earlier.
In 2020, the company received an order for 10,000 electric vans from United Parcel Service, with the option of an additional order of 10,000 units.
(Reporting by Akash Sriram in Bengaluru; Editing by Uttaresh.V and Devika Syamnath)