Automobile

How EV startups aim to avoid Tesla’s ‘mass production hell’

Arrival plans microfactories close to major customers around the world, cutting shipping costs and hiring local workers.

“You have to raise so much money to do this the traditional way that it keeps startups from coming forward with new ideas,” said North American head Mike Abelson, a former General Motors executive.

Arrival raised about $660 million from its March public offering and is building two U.S. plants: one in North Carolina making vans for United Parcel Service, its largest customer to date, plus another in South Carolina that will make buses. In addition, it is building a factory in Spain. Abelson said Arrival will announce more plants later this year.

Arrival’s first microfactory in Bicester, England, will serve as the blueprint for other plants. The lack of a paint shop is just one of the ways in which the company will steer clear of big-ticket items that traditionally have defined automotive production.

The startup’s engineers have built molds for plastic body panels costing thousands of dollars versus the millions of dollars needed for a traditional metal die. Arrival’s engineers have also designed their own molding machines.

Abelson said Arrival needs around 70 robots per microfactory and the startup is buying only commonly used, generic robots from long-time auto industry suppliers Kuka and Italy’s Comau — eschewing expensive made-to-order robots. Comau is owned by automaker Stellantis.

Robots are programmed to do double or triple duty. In a large traditional car plant, if you need to apply adhesive at different points during assembly you add more adhesive stations along the line to churn out a vehicle per minute.

But in Arrival’s microfactory there will be one adhesive station and autonomous wheeled robots, designed in-house, will carry a chassis back and forth throughout the assembly process.

Going small means that Arrival can commit to 10,000 vans annually per plant rather than 100,000, Abelson says. Each microfactory will create around 250 jobs, nowhere near the many thousands created by a large auto plant in the past.

“That means if a plant does not work out, it’s not a disaster for a local economy,” Abelson said. “A major car plant closing is a big hole to fill.”

Electric vehicle maker Canoo has adopted a similar strategy to Arrival’s. But CEO Tony Aquila said Canoo will build a “mega-microfactory” to serve as a hub for smaller future factories.

Electric Last Mile Solutions plans to launch a small electric van in the United States later this year and at first will reassemble prefinished vehicles made in China at a former GM plant in Mishawaka, Ind., adding new seatbelts and other safety features to meet U.S. regulations.

CEO James Taylor said this will initially save hundreds of millions of dollars on stamping dies and body shop welding equipment. As revenue grows it will incorporate more American parts over time.

“We’ll work our way backwards, adding more and more local content as we go,” Taylor said.

Other startups are outsourcing manufacturing to cut costs.

Tel Aviv-based REE Automotive Holding is leaning in to agreements with American Axle and Mitsubishi Motors to help build its electric platforms for delivery vehicles and people movers at scale.

“The biggest challenge for new players like us is at the end of the day you need to manufacture at automotive grade and automotive scale,” said REE Automotive CEO Daniel Barel. “With us, everything already comes at automotive scale because it’s American Axle or Mitsubishi.”

REE and Fisker also have both teamed up with Canadian supplier Magna International to build their EVs, while Fisker has a similar agreement with Taiwan’s Foxconn Technology.

Contract manufacturing deals reduce upfront costs, in return for Magna or Foxconn taking a cut of revenue and potential profits. Henrik Fisker, CEO of the EV startup that bears his name, said the alliances should also help secure equipment and parts at a time when supply chains are snarled.

“Foxconn and Magna, they will get all the equipment they need,” said Fisker. “They have the capital. They have the reputation. We are not here to set up our own factory in the desert.”

Most Related Links :
reporterwings Governmental News Finance News

Source link

Back to top button