In our recent assessment of the UK’s transportation sector, we highlighted the unfolding situation of a promising electric van startup facing potential administration. Today, Arrival, the UK-based startup aiming to revolutionise electric van production, has officially declared insolvency and appointed administrators from EY. 

The company’s assets, encompassing electric vehicle designs, software, intellectual property, and R&D assets, will now be put up for sale by the administrators. Established in Banbury, Oxfordshire, in 2015 by Russian billionaire Denis Sverdlov, Arrival embarked on a mission to simplify and cost-effectively produce electric vans and taxis. It made headlines by listing on America’s Nasdaq stock market in 2021, momentarily achieving a valuation of $13 billion (£9 billion). 

However, despite ambitious goals, Arrival encountered challenges translating designs into production reality, leading to a decision last year to shift production from the UK to the United States and reduce its workforce. Arrival UK and Arrival Automotive, employing 172 individuals, have been affected by the insolvency, resulting in nearly 40 redundancies. While others are retained to aid in the business and asset sale process, there is no clarity on how many more job cuts will follow. 

Both UK-based companies currently undergoing administration proceedings are responsible for housing the intellectual property related to electric vehicle design and overseeing the majority of research and development (R&D) activities. Their key assets encompass intellectual property, R&D support equipment, proprietary software, and prototype vehicles.

Despite previous investments from Hyundai and UPS, including a public order for 10,000 electric vans, Arrival’s UK operations faced financial distress, leading to the suspension of share trading on Nasdaq. While the UK entities navigate insolvency, Arrival assures that its other subsidiaries will continue normal operations outside the administration proceedings. 

Arrival’s recent insolvency and the collapse of Britishvolt in January 2023 paints a concerning picture of the electric vehicle industry in the UK. This trend extends to other players like Volta Trucks, which filed for bankruptcy in October 2023. These events highlight the challenges that these companies are facing, including funding and operational sustainability. 

However, for distressed business buyers, these developments offer unique opportunities. Struggling companies seeking buyers present potential to acquire valuable assets at reduced prices. Moreover, buyers with electric vehicle expertise can leverage these distressed assets to enhance their market position or expand into new segments. Despite challenges, strategic acquisitions could drive growth and innovation amid industry turbulence.