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Business lessons

Electric van maker once valued at £10bn collapses into administration

OK

Arrival had planned to make electric vans and buses at small, robot-led “microfactories” that would be cheaper to set up than traditional car plants.

Possbily there’s a reason the car makers use large plants? The economies of scale outweigh the costs?

16 thoughts on “Business lessons”

  1. Modern car manufacturering is dominated by the cost of capital. The leaders are Germany, Japan, China a the USA who funnel huge amounts of cheap capital to their industries. Although I am not familiar with this businesses business plan I guess the idea of the microfactory was to reduce the amount of capital needed. It is not really obvious if the plan or its execution was flawed or whether it is simply that competing with state sponsored businesses is difficult.

  2. Looking at the picture on the article, those milk floats would only have to be painted red and they would not look out of place being driven by Postman Pat.

  3. A British electric van maker once valued at $13bn (£10bn) has gone into administration after burning through $1.5bn without having sold a vehicle…

    Arrival secured hundreds of millions of investment from the likes of BlackRock, BNP Paribas and Hyundai before going public…

    The company last year switched its plans to manufacturing in America in an attempt to benefit from Biden administration subsidies, although production never began…

    The company had more than $300m in debt as of last June.

    And in other echoes from the past, is anyone else thinking DeLorean?

  4. Speaking from a position of total technical ignorance, how did they cock this up? They even had customers lined up.

    Aren’t EVs simpler than ICEs? E-vans just need to be able to shift a certain weight and capacity and maximise range, although only up to a point as they’re all go back to the depot to recharge overnight. They don’t need complicated stuff. Can’t be that hard, surely?

    Although:

    The company last year switched its plans to manufacturing in America in an attempt to benefit from Biden administration subsidies

    Perhaps it was just a scam to farm subsidies and part the thicker VCs from their cash?

  5. “Aren’t EVs simpler than ICEs?”

    No.
    The steering, suspension, indicators and so on are the same.
    The brakes must be much bigger (‘cos of the greater weight) and is complicated by being split between conventional friction devices, and regenerative braking using the motors.

    Instead of a ICE you have 2, or 4, very high-tech electric motors and semiconductor drive controllers, which handle more power than the local substation (100s of kW). Enormous amounts of heat must be dissipated safely from within these small components. And instead of aluminium and steel, you’ve used lots of copper, neodymium and other ‘rare-earths’ that China prefers to sell manufactured into goods rather than as raw matrerials. (The US prevents them being mined in the US for ecoloon reasons).

    You also have to find room for a very large and very heavy incendiary bomb, aka the battery. This needs to be very low down, so the thing can corner without barrel-rolling. This places the battery very close to the potholes, sleeping policeman and other damage creators. It’s nice if there is some space left for the passengers and cargo too.

    The battery needs many internal sensors to measure temperature and charge, so that it can be safely used. More very complex semiconductors. Oh, and instead of a pipe and a flap for refuelling, you need an enormous, high voltage connection, and a computer to talk to the charger, to discuss how and if the battery can be charged (not too hot? not too cold? well ok then…)

    And there’s no plentiful supply of low-grade waste heat to defrost the windscreen and heat the occupants.

    So simpler: No.

  6. @Tim the Coder

    Excellent spiel, except that the EV suspensions are not the same.

    Where they’re based on ICE vehicles they’re similar but stronger (to deal with the extra weight).

    Where they’re entirely new platforms the suspensions are quite different.

    Doesn’t alter your overall point, of course.

  7. “Speaking from a position of total technical ignorance, how did they cock this up? They even had customers lined up”

    This clearly didn’t help their cause:

    “Struggling British electric vehicle start-up Arrival faces delays to its first working van after one caught fire during demonstration for delivery firm UPS – its largest customer.

    No one was hurt in the incident, but after the van was wheeled out of the factory the flames melted part of the surface of the car park

    https://www.dailymail.co.uk/news/article-11398177/British-electric-vehicle-start-Arrival-hit-van-catching-fire.html

  8. @Interested
    I over simplified. I don’t mean the suspensions are exactly the same, just that the task is identical, (apart from the heavier weight) and hence the suspension of an EV will be of comparable complexity to that of an ICE vehicle. You still need springing, shock absorbers, tracking adjustments, jacking points, etc.
    No reason for any of that to ‘go away’ just ‘cos the drive torsion is derived from a magnetic field instead of a hot compressed gas expanding.

  9. @BiW “they would not look out of place being driven by Postman Pat”

    At least Postman Pat delivered the mail on time and didn’t just dump it in a wheelie bin on a collection day.

  10. I’ve just been reading Inside the Machine by David Twolig, who was the lead engineer on the first generation Nissan Cashcow, the Renault Zoe and the Alpine A110.

    The sheer hard work required to get a new car design over the line is astonishing.

    In terms of EVs, they have to err on the side of caution and shut down if a current leak is detected just in case that current leak is actually several hundred volts going between the car, the operator and the ground.

    It’s well worth a read.

    Arrival had a great idea – robot cells- but I imagine the precision involved in getting a robot arm to put a small screw in a hole is very time consuming when tolerances are added up.

  11. Would a single EV manufacturer have sold a single EV without idiot politicians throwing obscene amounts of taxpayer’s money at them?

  12. Any promise of micro-factories is always a scam. The founder gets lots of photos with local bigwigs desperately hoping he’ll build a factory in their constituency. See also: the air car guy.

  13. Saw an interview with Musk where he pointed out the real achievement with Tesla was scaling up to economic production levels, pointed out it’s much harder figuring out how to make 1,200 cookies vs a batch of 12 in your kitchen

  14. It was another ‘Green Crap’ scam. Blackrock etc invested lots, then mass PR. Next it’s floated on Nasdaq for big profit, then collapses as nobody will invest in firm

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