Jhe past year has been tricky for electric vehicle startups. After an explosion of investment mania in which companies raised billions on the mere promise of battery propulsion, valuations have come down to earth.
One of the loudest noises came from Arrival, the closest you could call a British EV champion. Its market value on the Nasdaq has fallen from $15bn (£11.6bn) in March 2021, when it first completed a merger with a listed cash shell, to around 1.75 billion dollars.
Almost all of its startup rivals have suffered similar dips, but Arrival is arguably an outlier. The company is trying to move fast – launching a van, bus and car at the same time – and breaking the traditional industrial model, using robot-controlled “micro-factories” which it hopes , will bounce manufacturers from the Henry Ford era to the iPhone. time.
The UK is key to these ambitions, and Arrival – founded by Russian entrepreneur Denis Sverdlov, incorporated in Luxembourg, listed in New York, but with research and development in the UK – is in turn a fitting symbol for the hopes of the British motor industry. .
Its first products are developed in Banbury and built in Bicester, both in Oxfordshire, and the company wants Bicester to be the model for micro-factories around the world. Now all that remains is to make the thing work. It’s proving harder than expected: delays mean he’s had to halve the forecast for this year to 600 vans.
“There are all kinds of people wondering if the micro-factory will work,” said Mike Abelson, chief executive of Arrival Automotive, speaking from the hangar in Bicester, where half-wrapped robot arms stand ready. to start working. “The only way to prove it is to produce the vehicles. We will do it this year, at pace and with quality. I am very confident.
Factories will cost even less than the £100m arrival originally suggested when it first exited ‘stealth mode’ in 2019; the latest estimate, once the model works, is £38m. It pays for a micro-factory theoretically capable of producing 10,000 cars a year – unlike the hundreds of millions of pounds needed for a traditional full-scale car factory. Arrival hopes to be able to set up a new factory anywhere with a big enough hangar (and market) in six to 12 months, compared to an industry that typically moves in seven-year cycles.
“We don’t have to plan four or five years ahead,” says Abelson. “This idea that we can react quickly to demand is a big advantage.”
The demand is there, if it can deliver. Arrival has 60,000 orders for the van, which will be available with battery capacity options between 67 and 133 kWh; the latter would give a range on a charge of 249 miles, says Patrick Bion, a former Tesla engineer who is leading work on the pickup, which begins road testing this spring. Bion took the wheel for a short demonstration in the parking lot: the van moved quietly and relatively smoothly with a tight turning circle, although an inelegant swerve to stop showed that there was still work to be done.
Production will be controlled by robots built by a former NASA roboticist, with autonomous mobile platforms (joyfully named WeMos, short for “wheeled mobility”) transporting the vehicles between six cells with robot arms arranged around them. ‘them.
The vans are made up of around 30 “Lego block” sub-assemblies, and the process aims to avoid complex and time-consuming assemblies such as welding. The same goes for the buses, which are made up of 1.5 meter modules that can be mixed and matched to add more doors or seats.
The car adds another intriguing direction. Arrival is working with Uber to design a tough vehicle for taxi app drivers – although it’s sold on the open market, meaning some retail demand is also likely.
All vehicles share many components, such as battery modules, inverters, and drive units. They also use plastic composite body panels, which saves weight and avoids huge and expensive metal presses. Using such fossil fuel-based products is an uncomfortable compromise for a company that values its green credentials, but Arrival claims the panels are 100% recyclable.
At its Banbury and Bicester facilities, the company still has a startup atmosphere, with employees meeting for lunch in a canteen right on the factory floor. There’s little sense of hierarchy and people roam around – including Sverdlov, who clashes with the Observer briefly, before rushing to test some prototypes after a nervous reception.
Later that day, he offers a few more words when our paths cross again. “We are doing something that has never been done before,” he says. “I think we’re doing it very successfully.”
Sverdlov mostly avoided reporters when he could. He was born in the USSR, in present-day Georgia, and founded a software company in 2000, after graduating from university in Saint Petersburg. In 2007, he founded the telecommunications company Scartel, which also made the unusual Yota smartphones. He sold it in 2012 for $1.2 billion, before taking a surprising step: he served just over a year in the cabinet of then Russian Prime Minister Dmitry Medvedev as Deputy Minister of Communications and Media.
the Observer visit on arrival took place before the invasion of Ukraine by Russia. Sverdlov later said via a spokesperson that his days of traveling around political circles in Moscow were long gone and that he and his family had been living outside Russia since 2013. He said he had never met Vladimir Putin personally and that he had “no connection with the Russian government in any form”.
Scartel’s success brought him into contact with Russia’s wealthy class. Sergey Chemezov, a now-sanctioned telecommunications oligarch and close friend of Putin, was seen as a supporter (but not a shareholder) of Yota, and the company was later taken over by sanctioned billionaire Alisher Usmanov’s MegaFon. Most notably, Winter Capital, an investment fund founded by Russia’s richest man, Vladimir Potanin, has a small stake in Arrival. Potanin was sanctioned by Canada earlier this month.
The Arrival declined to comment Potanin, but said it was “against any kind of war”, in a statement, adding: “The Arrival is saddened and concerned, like the rest of the world, by the impact of the situation on all communities involved in the ongoing conflict in Ukraine.
The company does not depend on Russian capital or materials. Arrival’s biggest investors are companies known around the world, ranging from the world’s biggest investor, BlackRock, to UPS – the global delivery company, with which it has a deal to supply vans – and the Korean automaker Hyundai.
Sverdlov, whose Kinetik fund still controls nearly three-quarters of the company, is clearly very closely involved in the management of Arrival. It was the origin of his whole “device on wheels” philosophy, says Bion.
There will be two tests of Sverdlov’s success: first and most obviously, can Arrival make money? But second, will other automakers convert to the micro-factory model? Even Tesla, the ultimate disruptor, has so far stuck to production lines. Arrival has discussed producing its vehicles on a traditional assembly line with Hyundai, but so far it is sticking to the “micro” approach.
“If you take the existing model and apply the micro-factory to it, it won’t make sense,” says Bion. “Other [carmakers] could do it this way, to simplify, but they don’t have the strength to do it.