The last year has been difficult to start electric vehicles. After an outbreak of investment mania, in which companies raised billions just by promising to run on batteries, estimates returned to the ground.
One of the strongest blows came from Arrival, the closest to what can be called the British champion of electric vehicles. Its Nasdaq market value fell from $ 15 billion (£ 11.6 billion) in March 2021, when it first completed a registered cash merger, to around $ 1.75 billion.
Almost all of its startup rivals have suffered similar setbacks, but Arrival is perhaps a special case. The company is trying to move fast – launching a van, bus and car at the same time – and break the traditional industrial model, using robot-controlled “micro-factories” that it hopes to transfer manufacturers from the Henry Ford era to the iPhone era.
The United Kingdom is key to these ambitions, and Arrival – founded by Russian entrepreneur Denis Sverdlov, registered in Luxembourg, registered in New York, but with research and development in the United Kingdom – is a suitable symbol for the hopes of the British car industry .
Its first products were developed in Banbury and built in Bicester, both in Oxfordshire and the company wants Bicester to be a model for micro-factories around the world. Now you just have to make things work. This is proving more difficult than expected: the delays mean it had to halve its forecast for this year to 600 vans.
“There are all sorts of people wondering if the microfactory will work,” said Mike Abelson, CEO of Arrival Automotive, speaking from the barracks in Bicester, where half-packed robots’ hands are ready to go. “The only way to prove this is to build vehicles. We will do this this year, with speed and quality. I am very confident. “
UPS has signed a supply contract with Arrival for its van. Photo: David Liven / The Observer
The factories will cost even less than the originally proposed £ 100 million arrival when it first came out of “invisible mode” in 2019; the latest estimate after the model works is £ 38 million. This pays for a micro-factory that could theoretically produce 10,000 cars a year – as opposed to the high hundreds of millions of pounds needed for a traditional large car plant. Arrival hopes to be able to install a new plant anywhere with a large enough shed (and market) in six to 12 months, compared to an industry that typically runs seven-year cycles.
“We don’t need to predict four or five years in advance,” Abelson said. “The idea that we can respond quickly to demand is a big advantage.”
Demand is there if it can provide. Arrival has 60,000 orders for the van, which will be available with battery capacity options between 67 and 133kWh; the latter would provide a mileage of 249 miles, says Patrick Bion, a former Tesla engineer who is directing work on the van, which begins road tests this spring. Bion took the wheel for a brief demonstration in the parking lot: the van was moving quietly and relatively smoothly with a narrow circle of turns, although the inelegant tilting to a stop indicated that work was still needed.
Production will be controlled by robots created by a former NASA robot with autonomous mobile platforms (cheerfully called WeMos, abbreviated to “mobility on wheels”), transporting vehicles between six cells with robot hands lined up around them.
“WeMos” moving parts around the factory. Photo: David Liven / The Observer
The vans are made up of about 30 Lego blocks and the process aims to avoid complex and time-consuming joints such as welding. The same goes for buses, which are made of 1.5-meter modules that can be mixed and combined to add more doors or seats.
The car adds another intriguing direction. Arrival is working with Uber to design a durable vehicle for taxi drivers – although it will be sold on the open market, which means there may be some retail demand.
All vehicles share many components, such as battery modules, inverters and drives. They also use plastic composite body panels, which save weight and avoid huge, expensive metal presses. Using such products based on fossil fuels is an awkward compromise for a company that makes much of its green mandate, but Arrival says the panels are 100% recyclable.
The company’s bus is assembled from mixed 1.5 meter modules. Photo: David Liven / The Observer
At its facilities in Banbury and Bicester, the company still has a starting atmosphere, with employees gathering for lunch in the canteen right on the factory floor. There is little sense of hierarchy and people are wandering around – including Sverdlov, who briefly encounters the Observer before going to test some prototypes after a nervous greeting.
Later in the day, he offers a few more words when our paths cross again. “We are doing something that has never been done before,” he said. “I think we’re doing it quite successfully.”
Sverdlov for the most part avoids reporters when he can. He was born in the USSR, in present-day Georgia, and founded a software company in 2000 after graduating from St. Petersburg University. In 2007, he founded the telecommunications company Scartel, which also produces the unusual Yota smartphones. He sold it in 2012 for $ 1.2 billion before taking a surprising step: he served for just over a year in the office of then-Russian Prime Minister Dmitry Medvedev as Deputy Minister of Communications and Mass Media.
The Observer’s visit to Arrival took place before Russia’s invasion of Ukraine. Sverdlov later told a spokesman that his days of movement in Moscow’s political circles were long gone and that he and his family had lived outside Russia since 2013. He said he had never met Vladimir Putin in person and that he had not “Connection with the Russian government in any form.”
Scartel’s success brought him into contact with Russia’s wealthy class. Sergei Chemezov, now a sanctioned telecommunications oligarch and close friend of Putin, was seen as a supporter (but not a shareholder) of Yota, and the company was later bought by MegaFon from sanctioned billionaire Alisher Usmanov. Most of all, 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.
Arrival declined to comment on Potanin, but said he was “against war of any kind”, adding: “The arrival is sad and concerned, like the rest of the world, about the impact of the situation on all communities involved in the ongoing conflict in Ukraine. “.
Russian founder Denis Sverdlov made his fortune in telecommunications. Photo: David Jenson / Alami
The company does not rely on Russian capital or materials. Arrival’s biggest investors are well-known companies from around the world, ranging from the world’s largest investor, BlackRock, to UPS, the global van delivery company and Korean carmaker Hyundai.
Sverdlov, whose Kinetik fund still controls nearly three-quarters of the company, is apparently very closely involved in Arrival’s management. He fosters his whole philosophy of “wheeling,” says Bion.
There will be two tests of Sverdlov’s success: first and foremost, can Arrival make money? But second, will other carmakers be transformed to the micro-factory model? Even Tesla, the destroyer in the best way, has so far stuck to the production lines. Arrival has discussed the production of its vehicles on a traditional assembly line with Hyundai, but has so far taken a “micro” approach.
“If you take the existing model and attach the microfactory to it, it won’t make sense,” says Bion. “Something else [carmakers] they could do it this way to simplify, but they have no incentive to do so. “
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