EV Startup Arrival Gets Hope For Survival From US IRA Subsidies: Report

  • Arrival ARVL reportedly expects its recently disclosed merger deal and significant subsidies from the US Inflation Reduction Act (IRA) to drive its business growth.
  • Last month, the company announced a merger with Kensington Capital Acquisition Corp V KCGI.
  • The merger will allow Arrival access to up to $283 million of cash to build a factory in Charlotte, North Carolina, to develop the company's XL van
  • The class 4, or medium-duty, delivery van qualifies for IRA tax (effective August 2022) credits up to $40,000, significantly above the $7,500 offered for smaller electric vans, per Reuters
  • The British EV start-up company aims to begin producing its medium-duty XL Van by late 2024.
  • "Arrival's new investors are 'very excited about our US product and the US market. There are a lot of tailwinds there,' including a recent California mandate requiring commercial fleets to transition to electric over the next 10 years," stated John Wozniak, CFO.
  • On May 15, Arrival reported a Q1 2023 business update, with cash and equivalents of around $130 million as of March 31, 2023
  • Price Action: ARVL shares are trading higher by 3.01% at $3.76 premarket on the last check Thursday.
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