Electric vehicle start-up Arrival is to relocate van production from its Bicester site to the US while making a “sizeable” reduction in its workforce, predominantly in the UK.

Arrival said it will now focus resources on a family of van products for the US market as well as its enabling technologies and “software-defined” factories

The UK-headquartered company said it plans to “further right-size the organization and cut cash-intensive activities while continuing to advance its core technologies” to preserve its cash reserves.

Earlier this year, the firm cut 800 jobs “in response to the challenging economic environment” and also mothballed plans for an electric bus and ride-hailing vehicle to preserve cash.

Under its latest plans, it will now focus resources on a family of van products for the US market as well as its enabling technologies and “software-defined” factories.

The Bicester plant – which only last month was used to produce Arrival’s first battery electric – will now be used to produce a small number of vans at Bicester to optimise its microfactory processes and support trials with customers.

The company said major factors in its decision to shift focus to developing its US business included the tax credit recently announced as part of the US Inflation Reduction Act – expected to offer between $7,500 to $40,000 for commercial vehicles, the large addressable market size, and substantially better margins.

It’s now looking to raise capital to fund the commercialisation of these vehicle programmes in the US and added that it’s exploring all funding and strategic opportunities needed to bring the vans designed for the US into production at the company’s second microfactory in Charlotte, North Carolina.

Arrival has an order from UPS for 10,000 electric vans. The delivery giant announced in January 2020 that it had ordered the vehicles for use in the UK, Europe and North America.