A U.K. company that builds electric vehicles is betting its slimmed-down approach to manufacturing will be the key to finding success in South Carolina’s $27 billion-per-year automotive industry.
London-based Arrival, founded in 2015, recently announced plans to build a microfactory in Rock Hill to make electric buses for the Upstate region.
The manufacturer is expected to create 240 jobs, with the first buses to be built by the end of next year.
The big difference between Arrival and the state’s big three automotive manufacturers — BMW, Volvo Cars and Mercedes-Benz Vans — comes down to size. Arrival said it will invest $46 million in its factory — far short of the $500 million to $11.1 billion the other carmakers have spent on their sites.
And the Arrival plant’s footprint of roughly 200,000 square feet can fit in many existing industrial buildings, unlike the millions of square feet and hundreds of acres the others require.
“The rule of this game of big factories is broken,” Arrival CEO Denis Sverdlov told Forbes magazine. “If you do things exactly the same as others do it’s quite strange to expect better results.”
Mike Ableson, Arrival’s chief executive for North America and a former General Motors vice president, could not be reached for comment. But in a prepared statement, he said the “new microfactory in South Carolina is the beginning of a paradigm shift in the EV (electric vehicle) space.”
A second microfactory is scheduled to open next year in Bicester, England.
The microfactory concept will utilize a cell-based assembly method to produce vehicles rather than the traditional moving automotive production line. Each cell will have employees and equipment dedicated to a specific task in the overall manufacturing process, and the vehicle will stay in that cell until that task is completed. Then it will move on to the next cell for additional work.
It’s much the same way Boeing Co. builds its 787 Dreamliner jets in North Charleston, with each plane spending time at several different “positions” until it is completed and ready to roll out of the assembly building.
And, like Boeing’s Dreamliners, Arrival’s buses are built of composite materials joined together with high-tech adhesives. Arrival said it plans to source its materials from a regional supply chain.
Arrival won’t need an expensive paint shop like traditional automakers because its buses can be made of died materials or wrapped with a vinyl covering.
Arrival, which can also build commercial vans on its microfactory platform, has not said how much its buses will cost but they will be priced similar to diesel vehicles.
The company has lined up a blue-chip roster of financial backers. For example, the investment titan BlackRock Inc. recently invested $116 million in Arrival, which also has support from traditional automakers Hyundai and Kia.
Another investor, United Parcel Service, has agreed to buy 10,000 of the company’s electric vans in a deal worth nearly $500 million.
Sverdlov founded Arrival after the $1.2 billion sale of Russian wireless phone company Yota Group, which he founded and ran, according to Forbes. He created the venture capital firm Kinetik after that deal and invested $26 million into the electric vehicle venture.
Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_