Electric vehicle startups face an uphill climb

Apr 29, 2023

Photo courtesy of Arrival

UPS-backed electric vehicle startup Arrival built its first delivery van last week — a significant milestone, considering the challenges it and other upstart EV makers like it are facing.

Why it matters: Arrival and other fledgling commercial EV companies are struggling to launch production as funding dwindles and bigger rivals like GM and Ford start to crank out electric trucks and vans of their own.

Driving the news: Arrival said Friday it had missed its third-quarter target to start serial production, but celebrated the fact that it produced its first "production verification vehicle" — in other words, an early prototype.

Arrival's challenge is doubly hard: It's trying to produce an innovative electric vehicle while simultaneously pioneering a radically new manufacturing process.

How it works: Instead of a moving assembly line, automated mobility robots carry unfinished vehicles to different stations, where other robots are assigned a series of assembly tasks.

The process saves a fortune on traditional processes like stamping, welding and painting, but it's difficult to master, Mike Abelson, CEO of Arrival's U.S. operations, tells Axios.

What to watch: Arrival, which delayed an electric bus project and laid off some employees to conserve cash in August, now says it needs to raise more capital.

The big picture: Other struggling EV manufacturers face similar challenges as financing options tighten.