Arrival, the UK start-up focusing on development of commercial electric vehicles, has revealed that it is to cut its workforce by half as it focuses on incentives to build its operations in the United States.

The company said the layoffs, part of a plan to significantly reduce costs, would leave it with 800 employees globally.

It was yet to give details on where the bulk of the job losses would fall.

The bulk of its teams are in the UK and in Georgia – the latter destination a result of the company’s decision to pull out of Russia because of the Ukraine war.

Arrival has struggled to grow because of persistent difficulties raising funds – with start-ups generally finding it more difficult to secure supplies and meet heightened costs.

Funding troubles accounted for Britishvolt earlier this month.

Arrival had previously revealed that it was to shift its focus away from its UK operations, which include state of the art production and development facilities in Oxfordshire, to take advantage of sweeteners being offered by the US government.

Incentives for green energy initiatives, available to both businesses and the public, under the Inflation Reduction Act have placed western governments and the European Union (EU) under huge pressure to follow suit or lose green investment.

The EU, for example, argues that the $369bn (£298bn) package of subsidies break World Trade Organisation rules on the grounds that the act would discriminate against imported goods.

While public road trials in the UK of its first certified and registered vans have begun, and are continuing, Arrival expects its US Van product will start production in Charlotte, North Carolina, in 2024.

That, however, remains dependent on the raising of additional capital.

Arrival said it had appointed Teneo, a financial adviser, to assist in “evaluating strategic alternatives, including opportunities to raise additional capital, optimise its balance sheet, and improve liquidity.”

The company added: “When combined with other cost reductions in real estate and third-party spending, the company expects to halve the ongoing cash cost of operating the business to approximately $30m per quarter.

The company also appointed Igor Torgov, who joined in February 2020, as its chief executive officer.

He said of the task ahead: “Arrival has developed unique technologies in a market that has huge growth potential and can play a key role in addressing climate change.

“To unlock these opportunities, we need to make difficult decisions and to take swift action.

“Following a detailed evaluation of Arrival and the wider EV market during the past two months, the leadership team and the board have taken decisive action to ensure the most effective use of our current resources and optimise the efficiency of the business.

“The actions support our journey to become a champion in innovative products and new, more efficient methods of vehicle production, particularly in the important US market for commercial electric vehicles.

“We are keenly aware that these decisions, while necessary, will have a profound impact on a significant number of our colleagues. We are 100% committed to supporting our employees during this difficult process.”

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