The startup of the ex-Deputy Minister of Communications stopped the development of its famous electric buses. They were supposed to be produced in Moscow

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Founded by the former Deputy Minister of Communications Denis Sverdlov, the Arrival company stopped developing electric buses, which the city authorities became interested in back in 2020. They wanted to open a plant for their production in Moscow. Arrival froze the project in order to cut costs, simultaneously leaving the Russian market amid sanctions and starting to cut 30% of its staff.

No electric buses

British company Arrival, founded by the former Deputy Minister of Communications Denis Sverdlov, stopped work on two of its largest projects of three. According to the Financial Times, the development of an electric bus and an electric car went under the knife.

Now Sverdlov’s startup wants to focus exclusively on its electric vans. This is the main project of Arrival, but it should be noted that in the seven years of the company’s existence, despite large investments and already signed contracts for the supply of these vans, Arrival has not started mass production of them.

The electric bus is an important creation of Arrival for Russia. As CNews reported, the company showed it in the summer of 2020, in the midst of the global coronavirus pandemic. The electric bus was positioned by the company as a means of transporting passengers with increased security measures that reduce the risk of contracting COVID-19.

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Arrival Buses may never appear on public roads

The bus is called Arrival Bus. It attracted close attention of the Moscow authorities – in early October 2020, they entered into negotiations with Sverdlov’s company, the purpose of which was an agreement to launch the production of such vehicles in Moscow.

It was assumed that the capital’s Arrival factory would be able to assemble up to 1,000 of these buses every year. The further fate of electric buses and agreements with the Moscow authorities is unknown, but, probably, Arrival Bus, even if Sverdlov unfreezes this project, will not carry residents and guests of the capital.

As early as mid-May 2022, the Arrival management decided to completely stop its business in Russia. Denis Sverdlov’s company not only curtailed all business, but at the same time moved the staff of its Russian representative office, almost entirely consisting of developers, to Georgia.

What could have happened

As the Financial Times writes, citing three sources close to Arrival at once, there is only one reason for refusing the bus and car – finances. The top management of the startup decided to cut costs by a third and put all their efforts into finalizing their electric van in order to finally put it on the conveyor.

Arrival Van remained the only project of Sverdlov’s startup still operating

If all goes according to plan, the first Arrival Vans, ready to ship to new owners, will see the light of day in the fall of 2022. No exact date has been set.

Apparently, the reduction in Arrival’s costs will affect not only the termination of work on two of the three key projects. CNews wrote that in June 2022, Sverdlov’s startup began to prepare for the dismissal of almost a third of its employees. 30% of the company’s employees – about 900 people – will go looking for a new job.

Falling shares

The events taking place inside Arrival may be related to the rapid drop in its value. At the end of 2021, the company went on an IPO, where it bailed out in the range of $1.3 billion, after which a sharp drop in the value of its shares followed.

Arrival shares are in no hurry to rise in price

In the fall of 2021, Arrival securities were worth around $16. However, then the decline began. On August 5, 2022, one share of Arrival cost around $1.8, that is, in a year and a half, the company’s securities fell in price by almost 20 times.

All is not lost yet

According to the Financial Times, if Arrival manages to bring its electric vans to more or less mass production, then it will unfreeze an electric car project called the Arrival Car. The company showed it in December 2021.

Arrival Car can still come back to life

Arrival is working on its electric car together with the transport company Uber, which decided in early spring to leave the joint venture with Yandex on the basis of anti-Russian sanctions. The partners intended to start production of cars at the end of 2023.

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The fate of the Arrival Bus electric bus at the time of publication of the material remained unknown. It is possible that Sverdlov’s company will no longer return to work on it.

Politician and businessman

Denis Sverdlov founded Arrival in 2015 in the UK. At first, the company was called Charge R&D.

Sverdlov himself is a graduate of the St. Petersburg State University of Engineering and Economics with a degree in Accounting and Audit. His first job in 1995 was the Metiz plant, where he worked as a system administrator. Two years later, he moved to the position of a consultant for the implementation of ERP systems in the MKD company (St. Petersburg), and three years later he opened his own business by founding his own company IT Vision for the implementation of ERP systems.

Denis Sverdlov

2003 in the life of Sverdlov was marked by the merger of his company with Korus Consulting. In the combined enterprise, he took the position of managing partner. Four years later, Sverdlov found himself in the chair of the director of Skartel, known under the Yota brand, which he released only in 2012 in order to briefly retrain from a businessman to a politician.

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In July 2012, Sverdlov was appointed to the post of Deputy Minister of Communications by decision Dmitry Medvedev, who at that time held the post of Russian Prime Minister. A little over a year later, Sverdlov resigned, moving to the post of adviser. Officially, this was explained by the entry into force of the law banning officials and members of their families from having foreign assets and the fact that Sverdlov’s wife had a foreign bank account. He left this post at the end of 2013, and in October he was approved for the position of chairman of the board of directors of Ruselectronics, which is part of the Rostec state corporation. In 2015, he founded his British startup Arrival.




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