Instead of investing billions of dollars, these $50 million plants could save companies.
Electric car and van startups are looking for new ways to manufacture their products. They all learned from Tesla which experienced a manufacturing hell when first producing its vehicles.
“The thing that’s remarkable is that Tesla didn’t go bankrupt in reaching volume production,” Tesla CEO Elon Musk said in a July 26 earnings call, according to Reuters.
Now British-American startup called Arrival, which builds electric vans and buses, has become the poster boy for using “microfactories” to build its products. These small plants cost a mere $50 million and do not feature expensive equipment. Arrival’s vans are made of lightweight colored plastic composite foregoing the need for pricey paint shops.
“Every Arrival vehicle is produced in small-footprint, low cost Microfactories,” says Arrival’s website. They describe these microfactories a
They also explain that they can be deployed quickly and can make the best of existing commercial spaces. This means they can deliver any type of vehicle to meet demand.
These microfactories are also built close to the customer base cutting shipping costs and allowing the firm to hire local workers. This is good for the environment and for local economies.
Arrival is now building two U.S. microfactories, one in North Carolina making vans for United Parcel Service Inc and another in South Carolina that will make buses. It also plans to build one in Spain. Its first microfactory was in Bicester, England. Each microfactory will deliver 10,000 vans annually and create around 250 jobs. That might seem like a small amount compared to traditional car makers but it is still noteworthy. And on the bright side, should the product not work it won’t cause a big impact on the local economy.
But we venture a guess that the vans will do very well. “Vans are the fastest-growing category in the automotive industry in general, and the simplest to understand,” Arrival founder Denis Sverdlov told Wired.