Arrival SA will terminate plans to merge with a blank-check firm and Nikola Corp will offload its newly acquired battery unit, the companies said on Monday, amplifying concerns over the struggles electric vehicle (EV) startups face in building scale.
EV firms have been facing dwindling cash reserves over the past few months, pressured by high costs related to production ramp-ups and soaring inflation.
Arrival had in April bet that the second reverse merger would release $283 million of cash held in trust before redemptions. In early 2021, the company had merged with CIIG Merger Corp. The EV startup in May reported a 37% slump in cash and cash equivalent at the end of the first three months of the year, from the preceding quarter.in November it would run out of cash before the end of 2023. The company has cut staff almost 75% to 750 employees in a bid to conserve cash.it aimed to begin producing its medium-duty XL Van at a "microfactory" in Charlotte, North Carolina, by late 2024.is still an anchor customer and it has ordered up to 10,000 vans.
In May, the company said it expects to report one or more material weakness in internal control over financial reporting.
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