© Reuters. FILE PHOTO: A man stands next to a fully electric test van, due to go into production in 2022, built by electric van and bus maker Arrival Ltd, that has seen a spike in interest due to soaring e-commerce amid the coronavirus disease (COVID-19) pandemic an
(Reuters) -Electric-vehicle startup Arrival SA on Tuesday warned it may not have enough cash to keep its business going next year and said it would explore all options to deal with the funding crunch.
U.S.-listed shares of the British firm fell 13.7% to $0.51 in trading before the bell, as it also reported a bigger loss for the third quarter.
EV startups that promised to disrupt the automotive industry with novel manufacturing techniques and products are scrambling to keep a lid on costs in the face of supply-chain issues and rising raw material prices.
“We’re actively engaged in capital raising … we’ve had some preliminary discussions with a handful of parties,” Chief Financial Officer John Wozniak said in a post-earnings call. It would take about six months for funding to materialize given the macroeconomic environment, he added.
Arrival said it would further “right-size” the organization and turn frugal in a move that could impact its workforce. It did not provide details on potential layoffs, however.
The company expects to have enough cash to fund the business into the third quarter of next year.
“We will use cash on hand of $330 million and look to secure new funds to achieve our goals in the U.S.,” said Chief Executive Denis Sverdlov.
The British company said last month it would restructure to focus on the larger U.S. market, with an eye on incentives from the Inflation Reduction 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 (NYSE:), with the option for an additional order of 10,000 units.
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