Trying to mass produce electric cars almost broke industry giant Tesla.
Elon Musk himself described it as ‘manufacturing hell’.
So, where does that leave electric vehicle startups that don’t have billions of dollars of investor’s cash but still want to ramp up production?
London-headquartered Arrival, is forging an alternative path….towards "microfactories."
Arrival specializes in building electric vans and buses.
Their microfactories are small plants that cost around $50 million and are light on expensive equipment.
The traditional approach taken by many automakers has been to spend above $2 billion on a factory big enough to build 240,000 vehicles or more annually.
Arrival's North American head Mike Ableson says building smaller factories is economically more sound.
Location: Charlotte, North Carolina
''First, it's better for us from a business plan standpoint, the fact that we can deploy a microfactory quickly into already existing buildings, get it up and running in six to 12 months with a very low capital spend, at least by traditional standards of 50 million dollars or less, means that we can deploy our manufacturing capacity in a much more agile manner than building an enormous central assembly plant at a time when the industry is in transition from fossil fuel vehicles to electric vehicles. This flexibility in how we deploy our capacity is a huge advantage for us.’’
"We've sized our microfactories such that a Van microfactory can produce ten thousand vans per year when operating on two shifts and the bus microfactory can produce a thousand buses when operating on two shifts.''
And Arrival is taking lessons from other electric vehicle giants.
During 2017 and 2018, Tesla struggled to scale up volume production of the Model 3 sedan.
The then loss-making automaker burned through cash, as it contended with an over-reliance on automation, battery issues and other bottlenecks.
It even built a new line in just two weeks in a huge tent outside its Fremont, California, factory to meet its production targets.
Arrival wants to avoid facing those same issues.
List graphic: Microfactories remain light on expensive equipment with only 70 robots needed per site.
There’s no need for paint shops because its vans are made of lightweight colored plastic composite.
And they’re built close to major customers around the world, cutting shipping costs and hiring local workers.
’’We think the distributed manufacturing approach is also an advantage for the communities where we cite our micro factories. We're going to be bringing jobs and paying taxes in many more communities than if we had one large central assembly plant. So it's good for our business, but it's also good for the communities where we operate. So instead of the minimum factory, we use a fairly automated process, but we're operating at full capacity. The micro factories should bring about two hundred and fifty to three hundred jobs to each community when they're operating on two shifts.‘’
Arrival's first microfactory is located in Bicester, England, and will serve as the blueprint for other plants.
The company raised about $660 million from its March public offering and is building two U.S. plants: one in North Carolina plus another in South Carolina.
It's also building a factory in Spain.
And Ableson says more plants will be announced this year.