EV Startup Arrival Gets Hope For Survival From US IRA Subsidies: Report
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- Arrival (NASDAQ: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 (NYSE: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.