United Kingdom-based Arrival, a maker of electric trucks and buses with a unique business model, is the latest SPAC attracting investor interest.
On Thursday, Arrival President Avinash Rugoobur was a guest on Benzinga's "SPACs Attack" show to talk about the upcoming public launch.
About Arrival: Arrival has been working on its EV technology since 2015 and boasts 1,500 employees, 90% of whom are engineers, Rugoobur told "SPACs Attack" co-host Chris Katje.
The company's most notable breakthrough in the competitive EV space is its vertical integration business model that relies on in-house components, materials and software to keep costs as low as possible, he said.
The company's technology and infrastructure can be leveraged to expand into new categories, such as working on autonomous vehicles or partnering with an EV software maker, Rugoobur said.
"There are multiple layers I think to the growth story of Arrival that we will be talking about more in the coming years," he said. "But for now it's about the bus, van and microfactory."
SPAC Over IPO: Arrival has successfully raised capital from Blackrock, Hyundai and Kia, as well as an investment and order from United Parcel Service, Inc. (NYSE:UPS), Rugoobur said.
The company is now in a position where it is ready to not only start bringing its vehicles to the market, but to scale its business to ramp production.
Arrival is set to become a public company by combining with SPAC company CIIG Merger Corp (NASDAQ:CIIC).
The Arrival team came to the conclusion that a SPAC is a superior way of going public after realizing that CIIG Merger shares a similar long-term vision, Rugoobur said.
UPS Deal: Arrival inked a deal in late 2020 to supply UPS with 10,000 of its electric delivery vans, and the company's president said the deal showcases the true strength of Arrival's business model.
Arrival's microfactory and vertically integrated model allow it to manufacture the type of vehicle UPS requires at a price that is competitive with traditional fossil fuel rivals, but much lower than comparable EVs, he said.
The concept of manufacturing 10,000 custom vehicles for one client was previously deemed impossible, Rugoobur said.
Traditionally, companies would need to produce hundreds of thousands of vehicles to generate a profit.
"So when UPS or any of the large or small customers needs very specific products for themselves, the traditional approach just can't do it," he said.
Timeline Update: Arrival has said it expects to start production of its electric buses by the fourth quarter of 2021, and electric vans are slated to launch in the second quarter of 2022.
The exec said there is no change to this timeline, adding that pre-production vehicles are already being built and will soon enter the testing phase.
CIIC Price Action: CIIG Merger shares were trading slightly positive at $28.34 off the open Friday.