Shares in UK electric vehicle startup Arrival SA crashed lower after a warning that it will have to focus just on the US van market in the medium-term in order to preserve cash, as it does not expect to generate revenue until 2024.
The Oxfordshire-based company said at its current rate it does not have enough cash to keep going until the end of next year.
There was US$330mln of cash in the bank at the end of September after quarterly loss of US$310.3mln was made, up from US$30.6mln year ago due to higher admin and development costs and US$232mln of non-cash write-downs.
Shares in the New York-listed company, which was founded by Russian billionaire Denis Sverdlov, dropped by 36% to US$0.38 cents in New York on Tuesday.
Arrival said it had not been able to raise a planned US$300mln in order to deliver its first vehicles in the UK this year and to launch a microfactory in the US next year due to the precipitous fall in its market value.
It has reportedly been informed by the operator of the Nasdaq exchange that it will be delisted if its shares fail to change hands for more than US$1 for at least ten consecutive business days before May.
As the high cost of tooling means the company cannot make a profit on the current L Van it has decided that the recent introduction of the US Inflation Reduction Act, where tax credits of up to US$40,000 are being offered for commercial electric vehicles, "the large market size, plus the anticipated higher margins for commercial vehicles, has now become the most attractive market for Arrival".
As a result, the remaining cash will be used to focus its technologies on products for the US market, "while seeking further funding to complete development of US products and enter production".
After announcing jobs cuts in the summer, it confirmed plans to "further right-size the organization" and extend the cash runway include cutting cash-intensive third-party spending and costs related to ramping up production of the L Van in Oxfordshire.