Arrival, the company creating electric vehicles (“EVs”) with its game-changing technologies has announced it is to float on the New York-based NASDAQ stock exchange.
The company, which has a major research and development facility in Banbury, and a micro-factory in Bicester, will combine with CIIG Merger Corp - a Special Purpose Acquisition Company (SPAC) - and the newly combined company will be listed on the NASDAQ under the new ticker symbol “ARVL”
What Is a Special Purpose Acquisition Company (SPAC)?
A special purpose acquisition company (SPAC) is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company.
The transaction values the combined company at $5.4 billion and is expected to provide approximately $660 million in gross cash proceeds to the Company which will be used to deploy its first two Microfactories in Bicester (UK) and South Carolina (USA) in 2021.
Arrival is challenging the 100 year old automotive production process, by producing its EVs in low CapEx, low footprint Microfactories. Its operations utilize Arrival’s in-house proprietary technologies and advanced cell-based assembly method to bring down the cost of EVs and accelerate mass adoption globally.
Arrival’s initial focus is on the commercial vehicle market, which is undergoing a seismic shift towards electrification in line with global public policy. Arrival believes that it is well-positioned to capitalize on this market opportunity with its technology-driven approach to a traditionally underserved market. The result is its best-in-class products with an exceptional user experience that are priced competitively with fossil-fuel vehicles and have a substantially lower total cost of ownership (“TCO”) than both fossil fuel and electric variants.
Arrival’s transformative Microfactories can be deployed anywhere in the world within six months, using existing warehouses close to areas of demand. These Microfactories are designed to produce any vehicle from Arrival’s portfolio customized for the cities and regions they serve. The vehicles are designed specifically for Microfactory assembly using Arrival’s proprietary in-house developed components, software and sustainable composite materials.
Arrival’s vertical integration and new method of production break the rule of economies of scale and create strong unit economics for the whole Arrival product portfolio, which Arrival expects will enable profitability for the business by 2023. Arrival’s strategy to reach industry-transforming flexibility and scalability is based on the utilization of Microfactories, as opposed to giant, capital-intensive legacy factories.
“With Arrival’s products, our clients are not forced to compromise between being green and being cost-efficient. Our focus on the whole EV ecosystem, new methods of design and production and our enabling technologies are the key to driving down the cost of EVs and accelerating the transition to zero-emission transportation globally,” said Denis Sverdlov, Founder and CEO of Arrival. “CIIG’s leadership team has invaluable experience building businesses globally across a wide range of industries. We are excited to partner with them as we begin our journey to being a publicly-listed company and delivering our products to customers and cities around the world.”
“Arrival’s bold, game-changing approach to the production of electric vehicles made the company the clear winner in our search for a partner,” said Peter Cuneo, Chairman and CEO of CIIG. “Operating in stealth mode for five years, Denis and his visionary team have rewritten the rules of the game for the auto industry. Arrival’s development of exceptional products using its pioneering technology and software alongside its groundbreaking new method of production can create an incredibly low TCO for customers which we believe stands them apart from everyone else in the electric vehicle industry. We look excitedly to the future and to our partnership with Arrival’s talented leadership team.”
Several blue-chip companies and investment firms have invested in Arrival, including Hyundai Motor Company, Kia Motors Corporation, Winter Capital, United Parcel Service (“UPS”) and funds and accounts managed by BlackRock. Hyundai and Kia are also exploring opportunities to co-develop zero-emission vehicles with Arrival.
In addition, alongside investment in Arrival in early 2020, UPS, the global logistics company, announced a commitment to purchase 10,000 electric vans and has the additional option to order more thereafter.
Successful technology entrepreneur Denis Sverdlov will remain as Arrival’s CEO, with ex-Cruise Head of Strategy, Avinash Rugoobur, continuing as Arrival’s President. Mike Ableson, former VP of Global Strategy at GM, is CEO of Arrival Automotive overseeing global production.
The combined company will add Peter Cuneo, CIIG’s Chairman and CEO, as Non-Executive Chairman to its post-closing Board of Directors.