Electric van company championed by Boris Johnson cutting 800 jobs

Electric car and van maker Arrival, one of the “green dozen” planet-friendly startups showcased by Boris Johnson, will cut up to 800 jobs in order to preserve its cash as it faces a “challenging economic environment”.

The company, which achieved a $13bn valuation last year in a stock market float in New York, needs to cut costs and workers by 30pc to preserve enough cash to survive until the end of next year, it said.

The company has 2,700 staff around the world, meaning about 810 jobs are at risk.

Arrival, which was founded in 2015, was included as one of Boris Johnson’s “green dozen” sustainable British champions last year. The company described its inclusion on the list as “an honour”.

It said in a statement: “Arrival has proposed plans that include a realignment of the organisation that would enable it to deliver business priorities until late 2023 primarily utilising the $500m cash on hand.

“Arrival’s proposal includes a targeted 30pc reduction in spend across the organisation and anticipates that it could potentially impact up to 30pc of employees globally.”

Last March the company secured a $13bn valuation when it joined the stock market through a merger with a special purpose acquisition company (Spac), cash shells that boomed during the pandemic.

In common with its electric car rivals, it was awarded a valuation closer to that of a tech company than a car maker when it first floated. However, its shares have fallen rapidly in line with the wider tech sector as borrowing costs have risen and the economic outlook has darkened. It is now worth less than $1bn.

Rising energy and wage bills are among the challenges facing electric vehicle makers, particularly those new to the market. Despite a deal with UPS, Arrival has not made any commercial vehicles yet.

Arrival plans to make its cars and vans in microfactories close to customers rather than the vast plants traditionally used to construct vehicles.

It says it can convert a warehouse for car making for $50m, well below the billions needed for a regular car plant.

Arrival was launched by Russian entrepreneur Denis Sverdlov and was largely self-funded from his $500m venture fund Kinetik until investment two years ago by BlackRock and Fidelity.

Sverdlov had founded several internet companies in the 2000s, before briefly becoming deputy communications minister under Vladimir Putin’s prime minister Dmitry Medvedev in 2012. He is now based in London.

The company closed its Russian operations in the wake of the country’s war on Ukraine.