More EV start-ups are confronted with growing pains, as both EV makers Arrival and Rivian have announced staff lay-offs almost simultaneously. Bracing for a price war, Rivian decided – again – to cut 6% of its workforce, while Arrival is forced to let go of half of its global employees.

At Arrival in London, the electric commercial vehicle developer’s headquarters, all hands are on deck. Last month its CEO Peter Cuneo was replaced by Igor Torgov, who needs to push forward a restructuring plan to keep the company from collapsing. Arrival is still on its path toward producing its first van, which isn’t expected to happen before 2024.

800 people are out

In the summer, the company already presented a change of course, shelving its plans to develop a bus and a car, prioritizing the genesis and production of its first zero-emission van.

This vehicle was planned to leave the assembly halls in North Carolina as of last year – beginning this year at the latest. But these plans have now been postponed to 2024, while the company admitted they are conditional under the prerequisite of raising new funds.

On top of that comes a move where Arrival slashes its headcount in half, reducing it to 800 employees worldwide. According to the company, this is a dramatic cut, but nonetheless necessary to minimize cost and optimize the existing cash. Chances are that Jeremy Offer, previously Chief Design Officer at Arrival, felt the downpour as he swapped his seat to become Head of Design at Volvo Cars late last month.

Sparing blue collars

Likewise, electric pick-up and SUV builder Rivian is streamlining its operations and waving goodbye to 6% of its working staff. It points to the weak economy and troublesome cash position but also to the price reductions, which were triggered by Tesla at the end of 2022, followed by Ford.

These predict a pricing war coming at the worst of times for newcomers who can’t write off costs on previous-generation models and are burning cash as they try to ramp up production.

Rivian is sparing its blue collars in the factory from the cutback. It’s the second time the company is reviewing its workforce. In June 2022, a similar-sized reduction was announced. Before the restructuring moves, Rivian employed 14 000 people.

The worst performer on Nasdaq

The company is still facing steep challenges in ramping up production and keeping cash levels up. The devaluation of its stock symbolizes it. Last year, it was the worst performer on the Nasdaq losing 80% of its value. Ford, which has now concluded the unwinding of its participation, attributes a big part of its $2 billion loss to Rivian.

Scaling up the assembly output seems to be the Achilles heel for many overpromising but money-swallowing start-ups. Last month, solar carmaker Lightyear was partially declared bankrupt after it had just started producing its first series of cars. Solar carmaker Sono Motors is also pursuing a last funding round for survival.