UK startup Arrival’s unique ‘microfactory’ produces its first electric van

Arrival, an electric vehicle startup based in the UK, announced that its so-called “microfactory” based in southern England has produced its first production verification vehicle. The news comes as the company is reportedly in talks to raise money so it can build and sell its electric vehicles in the US.

The electric van was produced using “in-house technologies, including composite materials, autonomous mobile robots, in-house components and a software defined factory,” the company said. The milestone is proof that Arrival’s microfactory concept, which are highly automated small-footprint facilities where it plans to build its vehicles, is working.

“This is the first time a vehicle has ever been built in our Microfactory, using a new method that does not use a traditional assembly line,” said Denis Sverdlov, founder and CEO at Arrival, in a statement. “Although we have not yet achieved serial production, we are focused on making it happen. We will continue to produce vehicles in our Microfactory in order to master at-scale production.”

It’s an important step for Arrival, which became a publicly traded company in March 2021 after merging with a special purpose acquisition company, or SPAC. Founded in 2015, Arrival is developing electric delivery vans with UPS as a customer as well as ride-hailing cars for Uber and public buses. It also has backing from Hyundai and Kia.

But it hasn’t been an entirely smooth ride. Sverdlov told Reuters that the company would miss its third quarter goal of starting serial production for the van, citing supply chain disruptions and “production hell.” (Tesla CEO Elon Musk famously described his company’s experience ramping up production of the Model 3 sedan the same way.)

“The supply chain is broken and we’re a new company,” Sverdlov told Reuters. “We are going through our own production hell … but we expect we can go through this much quicker than traditional companies.”

Arrival is eyeing opening several microfactories in the US in order to comply with the recently updated EV tax credits that require vehicles to be produced in North America, according to Bloomberg. It will need a lot more money to make that happen, with Sverdlov estimating the cost of a plant at $50 million, with an additional $50 million for working capital.

The cash crunch has forced Arrival to reorganize its company, reducing workforce and delaying spending on its bus project. The company is one of many EV startups that went public by merging with a SPAC in order to tap into vast quantities of money that was available over the last few years.

But since then, the legacy auto industry has begun to catch up, with electric commercial vehicles to emerge from General Motors and Ford as well as new entrants like Rivian, which is backed by Amazon.