Arrival, the latest EV company set to enter the public markets

Ines Ferré
·Markets Reporter
·4 min read

London-based Arrival is the latest electric vehicle start-up set to enter the public markets as the landscape of EV companies grows. Arrival announced a reverse merger with special purpose acquisition company, CIIG Merger Corp, at a valuation of about $5.4 billion.

The five-year-old start-up differentiates itself from other EV manufactures by focusing on electric vans and buses, with plans to open micro-factories in the U.S. and U.K in 2021.

“Everything makes us different. So we have very much different products. We have very different process of assembly. We use different materials to assemble our vehicles. We use different components. Our economics is unique,” said founder and CEO Denis Sverdlov on the day the SPAC agreement was announced.

“We’ve taken basically a centralized process of manufacturing and we’ve decentralized that to be able to place these micro-factories rapidly anywhere, and we can place them near areas of demand,” said the president of Arrival, Avinash Rugoobur.

“The technology is mature and now we’re looking to go to market with our bus, with an electric bus that actually can be priced at diesel prices and below,” he added.

Production on the electric bus is expected for the fourth quarter of 2021, followed by the van. A total of four vehicles are expected to hit the market by 2023. The company says it has signed orders for a total value of more than $1.2 billion. That includes 10,000 vans for UPS (UPS).

“Combined with the bus and the van, we see addressable market of over $430 billion and we have already started now commissioning factories,” said Rugoobur.

“We, as a company, expect it to be profitable in 2023 and not only profitable but also cash positive,” added Sverdlov.

Once the SPAC deal is completed, Arrival will be allowed to trade on the Nasdaq (^IXIC).

Arrival Bus prototype
Arrival Bus prototype

Growing number of EV makers

If you’re having trouble keeping up with the amount of EV makers flooding the market, it’s because there has been a slew of them this year as capital has flowed in to the electric space.

Chinese electric vehicle maker XPeng Motors (XPEV) soared more than 40% on its IPO day in August after pricing its American depository shares at $15. The stock recently gained 34% on the same day it reported better-than-expected quarterly results.

“We're very happy with both the delivery results as well as our financial revenue growth, but more importantly this quarter we also achieved our first ever positive gross margin for the company so I think all very exciting,“ Xpeng Vice Chairman and President Brian Gu said during an interview with Yahoo Finance Live.

Gu added Tesla’s (TSLA) popularity in China and government incentives to combat pollution have helped his company.

Chinese startup Li Auto (LI) went public at the end of July, pricing it’s IPO at $11.50 per American depositary share. The stock has rallied more than 80% in the last 30 days. Citigroup recently upgraded the stock to Buy from Hold following the company’s quarterly results

Electric truck startup Nikola (NKLA) listed on the Nasdaq via a SPAC merger in June. Shares have been on a roller coaster ride since its public debut. Founder Trevor Milton stepped down as executive chairman after short-seller Hindenburg Research published accusations against him and the company. Nikola has denied those accusations. The company has since been working on the terms of an alliance with General Motors (GM) announced back in September.

Electric SUV company Fisker (FSR) opened trading on the New York Stock Exchange in late October. Shares jumped 13% on the day of its market debut.

Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre

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