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

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The arrival foresees micro-factories close to major customers around the world, reducing shipping costs and hiring local workers.

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

Arrival raised around $ 660 million through its March public offering and built two factories in the United States: one in North Carolina making vans for United Parcel Service, its largest customer to date, and another in Carolina of the South which will manufacture buses. In addition, it is building a factory in Spain. Abelson said Arrival will announce more factories later this year.

Arriving’s first micro-factory in Bicester, England, will serve as a model for other factories. The lack of a paint shop is just one of the ways the company will avoid the big ticket items that have traditionally defined automotive production.

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

Abelson said Arriving needed around 70 robots per micro-factory, and the startup only purchased generic robots commonly used from long-time auto industry suppliers Kuka and Italy’s Comau – avoiding expensive robots made to order. Comau is owned by the automaker Stellantis.

Robots are programmed to perform double or triple tasks. In a large traditional auto factory, if you need to apply adhesive at different points during assembly, you add more adhesive stations along the line to produce one vehicle per minute.

But in the Arriving micro-factory, there will be an adhesive station and self-contained, in-house-designed wheeled robots will haul a chassis back and forth throughout the assembly process.

Getting small means Arriving can commit to 10,000 vans per year per plant instead of 100,000, says Abelson. Each micro-factory will create around 250 jobs, far from the thousands created by a large car factory in the past.

“This means that if a factory is not functioning, it is not a disaster for the local economy,” said Abelson. “The closure of a large auto plant is a big hole to fill.”

Electric vehicle maker Canoo has adopted a strategy similar to that of Arrival. But CEO Tony Aquila said Canoo would build a “mega-micro” to serve as a hub for future smaller factories.

Electric Last Mile Solutions plans to launch a small electric van in the United States later this year and, as a first step, will assemble pre-finished vehicles made in China at a former GM plant in Mishawaka, Indiana, adding new ones. seat belts and other safety devices to comply with US regulations.

CEO James Taylor said it would initially save hundreds of millions of dollars on stamping dies and welding equipment in body shops. As revenues increase, it will incorporate more American coins over time.

“We’re going to be working 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 looking into deals with American Axle and Mitsubishi Motors to help build its electric platforms for large-scale delivery vehicles and passenger vehicles.

“The biggest challenge for new players like us is ultimately that you have to manufacture at the automotive scale and at the automotive scale,” said Daniel Barel, CEO of REE Automotive. “With us, everything is already happening at the automotive level because it’s American Axle or Mitsubishi.

REE and Fisker have also both teamed up with Canadian supplier Magna International to build their electric vehicles, while Fisker has a similar deal with Foxconn Technology of Taiwan.

Contract manufacturing agreements reduce up-front costs, in exchange for Magna or Foxconn taking reduced revenue and potential profits. Henrik Fisker, CEO of the EV startup that bears his name, said alliances should also help secure equipment and parts at a time when supply chains are harassed.

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


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