What happened

The good times have definitely not arrived yet for electric vehicle start-up Arrival (ARVL 5.07%) -- its stock plunged 47.3% in January, according to data by S&P Global Market Intelligence. That continued a downturn that largely began in November, though the EV stock is down 87% from the high it hit in June.

Revolutionizing an industry is no easy task, but Arrival has set high goals for itself by promising to build electric vehicles through a decentralized manufacturing setup that takes advantage of unused warehouse and factory space that already exists.

The Arrival Bus

Image source: Arrival.

So what

Arrival went public in March through a reverse merger with a special purpose acquisition company (SPAC), and management set a goal of delivering its first all-electric bus in 2022's second quarter, followed by an electric commercial van in the third quarter.

The idea was that by focusing on the commercial transportation market of buses, delivery vans, and cars for ride-hailing services, it would be able to gain scale quickly. Yet even using vacant warehouses as "microfactories," building out the infrastructure to do that is a massive undertaking.

Vehicle manufacturing is a capital-intensive business, and Arrival seems to have hit some potholes in its efforts to access financial support. Its timetable for delivering its first electric vehicles has been delayed, and management now says its production schedule will be dependent upon it being able to access sufficient funds. As such, "previous long-term forecasts from the merger should no longer be relied upon."

Now what

Arrival has partnerships with some major companies that are willing to purchase its vehicles -- if it can deliver them. Uber, Hyundai, and UPS are all on board, but even its backers may be wondering if it will be able to achieve what it says it can. 

Although UPS has placed an initial order for 10,000 electric vans with an option to purchase 10,000 more, that order is subject to cancellation at any time without penalty, so the logistics giant can easily back out if it wants to.