Electric vehicle startup Arrival was recently in the throes of bankruptcy, but they’ve made a big move to stay afloat. In an effort to cut costs and preserve capital, Arrival has sold off some of their assets – including advanced manufacturing equipment – to struggling startup Canoo.
The acquisition is expected to reduce Canoo’s capital expenditures by 20%, making it a solid cost-saving measure. The purchased assets have been shipped and will find a new home in Canoo’s facility in Oklahoma. Among the assets are “like-new” items from Arrival’s business unit in the U.S., but it remains unclear if Canoo has acquired any of Arrival’s intellectual property.
Despite requests for comment, Canoo has not yet responded to the news.
In January, Arrival announced plans to sell assets and intellectual property from their U.K. division after filing for bankruptcy protection. At one point, Arrival was valued at over $13 billion and boasted big-name backers like Hyundai and UPS. Their mission? To transform the electric vehicle production process with compact “microfactories” that could be located in urban areas.
Those ambitious plans – including an electric bus, vans, and a purpose-built car for Uber – ultimately fell through as the company burned through cash and saw numerous executives depart. In an effort to conserve capital, Arrival had to restructure several times and shift their focus from the U.K. market to the United States. Unfortunately, they were never able to mass-produce any commercial vehicles and their market valuation now sits at a mere $7.7 million.
Meanwhile, Canoo has faced struggles of their own. Despite going public through a merger, the company has had trouble bringing their eye-catching electric vehicle to fruition. Their unique design is built on a “skateboard” architecture, with batteries and an electric drivetrain housed beneath the cabin.
According to reports, Canoo has a sales pipeline of over $1 billion thanks in part to a deal with Walmart for 4,500 units (with an option for 10,000 more). Unfortunately, converting those sales into actual deliveries has proven difficult for Canoo.
As a pre-revenue company burning through cash, Canoo has had to resort to stock splits and issuing more shares to stay afloat. Their stock price has struggled to stay above $1 and triggered a delisting notice, causing them to move to a different tier on the Nasdaq Exchange.
