Tesla electric vehicle rival files bankruptcy, begins liquidation
There's a reason very few new automakers have been launched over the past 40 or so years. Building and selling cars takes a tremendous amount of infrastructure.
When you add in having to create not just a new design, but a new method of powering your car, you see why big auto has generally been a closed club. Tesla (TSLA) , of course, has crashed that party, becoming the first startup electric vehicle manufacturer to operate at scale.
You can credit that to the genius and drive of Elon Musk. It may have been lost in his recent conversion to a conspiracy-theory-embracing, far-right internet troll willing to say anything so people pay attention to him, but Musk has been the leading entrepreneur of his time.
He has been a serial disruptor willing to take on industries that have a scale that generally gives them a moat against all competitors. Building a car company from scratch has generally been impossible but building one to sell EVs, a product where demand has always been suspect, was impressive even if Musk's recent actions have taken attention away from his accomplishment.
Big Auto has generally crushed any upstarts simply because of scale. Tesla's case, however, continually looks like an outlier as multiple EV companies have failed and others, like Lucid, have struggled to meet production goals.
Now, a once-hopeful player in the EV space, which once had a $13 billion valuation, has filed for bankruptcy, or at least the British equivalent of it, without selling a single car.
Arrival EV maker enters bankruptcy (administration)
Arrival, which has a decade of history, has entered administration, the British version of a bankruptcy filing. In theory, the move only impacts the company's assets in the United Kingdom, but that's functionally the entire company.
Instead of making just passenger cars, Arrival sought to build a large van, a bus, and a car that was being positioned for use by ride-hailing companies like Uber and Lyft. The company's XL Van, which sort of looked like a more-cheaply-made version of the Mercedes Benz Sprinter, appeared to be its signature product.
The company had bold goals, according to its website.
"At Arrival, we are reinventing both the design and production of electric vehicles for end-to-end sustainability. Only true innovation of both products and processes can deliver the radical impact we need to combat the worst effects of the climate crisis," it shared.
That was a big goal for a company that never sold an actual vehicle.
The company, which listed its stock on the Nasdaq, had recently been informed that it was being delisted.
What's next for Arrival?
After a promising start, which included backing from Hyundai and United Parcel Service (UPS) placing orders for its delivery van, it appears that Arrival will be sold for parts.
"Simon Edel, Alan Hudson and Sam Woodward of EY-Parthenon’s Turnaround and Restructuring Strategy team were appointed as joint administrators (the 'Administrators') of Arrival UK Ltd and Arrival Automotive UK Limited (the 'Companies'), both subsidiaries of Arrival," the company shared in a press release.
It appears that the company's 170 workers in the UK will lose their jobs.
"The Administrators are now exploring options for the sale of the business and assets of the Companies, including the electric vehicle platform, software, intellectual property and R&D assets, for the benefit of creditors," the company continued.
Arrival has been bleeding cash since 2021, and despite taking in $50 million in new money in 2023, it has run out of money before it sold a single vehicle.
The filing follows a number of other EV companies that have gone bankrupt. That includes another British company, battery maker Britishvolt; Proterra, another EV battery maker; Sweden's Volta Trucks, and Lordstown Motors, which intended to make EV pickup trucks.
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