Arrival stock: The electric bus maker stands to benefit from Biden's infrastructure bill - The Average Joe

    Arrival stock: The electric bus maker stands to benefit from Biden’s infrastructure bill

    Kevin Roche — Analyst

    August 12, 2021

    arrival electric vehicle

    August 12, 2021

    With the current bus infrastructure looking as durable as a cardboard box, it’s safe to say it’s in need of an overhaul.

    Arrival, the UK-based commercial EV company developing electric buses, recently went public via SPAC. And the transportation industry is knocking at its door.

    Modern buses made in modern factories

    As more of the 10b public transportation trips made by Americans each year become electric, the $62b commercial EV market is expected to grow 17% annually – and Arrival plans to capitalize on that growth with its artificial-intelligence-packed “Microfactories”:

    • Built in only six months at a lower cost using existing warehouses – offering greater flexibility.
    • Environmentally friendly, with lower overhead costs – making Arrival more profitable compared to competitors.

    Biden’s incoming infrastructure bill proposes $39b to modernize public transit – including replacing bus fleets with zero-emissions models. For Arrival, which just partnered with the City of Anaheim to start production on California’s first fleet of electric buses, that’s electrifying news.

    Arrival: The popular kid at the commercial EV table

    Riding high after raising ~$660m from its SPAC deal, Arrival plans to grow from 2 factories to over 30 by 2024. And Arrival’s financials tell a story of a pre-revenue company gearing up for a whole lot of orders.

    The company has over $1.2b in orders lined up with some big names in transportation:

    • Last month, Arrival partnered with Uber and LeasePlan to design their new ride-hailing EVs.
    • Last year, the company reached an agreement with UPS to produce 10k electric delivery vehicles through 2024.

    Arrival burned through $101m in 2020 and is expected to burn a whole lot more as it prepares to roll out its first vehicles later this year..

    Investors: Fool me twice…

    At this point, investors might be ready to write off EV companies – with its recent lackluster track record:

    • Nikola’s (NASDAQ:NKLA) CEO was criminally charged with fraud last week for manipulating the company’s stock price with false claims.
    • Lordstown Motors (NASDAQ:RIDE) claims it doesn’t have the cash to start commercial production a year after raising more than $675m.

    From the sheer number of orders to fill, Arrival looks like the real deal in a sea of frauds. But time will tell and with its first vehicles slated for production by the end of the year, investors will soon find out how legit Arrival really is.

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