A British-based company which boasted that it would be a global pioneer in electric vehicle manufacturing is working with advisers to prepare for possible insolvency.

Sky News has learnt that Arrival, which is listed on New York’s Nasdaq stock exchange, has drafted in Alvarez & Marsal (A&M) to advise it as it tries to salvage its future.

City sources said A&M had been appointed to advise Arrival’s board on a range of restructuring options, including contingency planning for administration.

The company has been teetering on the edge of bankruptcy for weeks, according to automotive industry sources.

A lifeline does remain possible if Arrival can secure alternative financing.

At least one fund is understood to have approached the company in recent weeks to propose a capital injection, although it was unclear this weekend whether any proposal would be deliverable before Arrival runs out of cash.

Arrival was one of a slew of electric vehicle companies which capitalised on a wave of investor demand during the last technology boom to raise money at multibillion dollar valuations.

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The London-based business went public in March 2021 through a combination with CIIG Merger Corp, a special purpose acquisition company (SPAC) set up by Peter Cuneo, the former Marvel chief executive.

On the day its shares began trading, it was valued at about $5.4bn (£4.2bn).

Arrival was backed by blue-chip global investors including BlackRock, which injected nearly $120m into the business in 2020.

Hyundai and Kia, the Korean carmakers, and the delivery service UPS were also early backers of the company.

It said it would cash in on demand for electric vehicles by targeting commercial customers rather than ordinary motorists.

In late 2021, it unveiled a prototype of a car designed to be used by ride-hailing companies such as Uber Technologies.

None of its vehicles have yet made it into commercial production, and it has been forced to slash hundreds of jobs, including many of its senior management team.

Since its stock market debut, Arrival has endured a torrid time.

Its stock has plummeted by more than 95% since it listed, and at Friday’s close it had a market capitalisation of little more than $30m.

In recent months, it has tried to secure new funding through a number of agreements with hedge funds.

Arrival also struck a second SPAC deal, with Kensington Capital Acquisition Corp V, which would have injected hundreds of millions of dollars more into the company.

The agreement between the two parties was terminated last month.

Arrival did not respond to a number of emailed requests for comment, while A&M declined to comment.

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