Arrival’s Van Microfactory Moving to North Carolina

Arrival, an electric vehicle startup with headquarters in the US and UK, has decided to move all of its Van production to Charlotte, North Carolina.

Instead of investing in mega production facilities, Arrival uses a microfactory model that installs assembly cells in existing facilities to build its all-electric vans.  Arrival cited federal tax credit incentives, large market size, and better margins as factors in its decision to focus on the US market.

Video Spotlight:  

• Inside the Microfactory (Oct 6, 2022, ARRIVAL)
• Making the Microfactory (Mar 22, 2021, ARRIVAL)

This post is based on the Electrek article, Arrival (ARVL) pivots business strategy again, moving Van production to US-based microfactory, by Scooter Doll, October 21, 2022, and the YouTube videos in the Spotlight. Image source: vladimir salman/Shutterstock

Discussion Questions:

1.  What are the dominant factors that influenced Arrival’s decision to move its van production to the US?

Guidance: The factors include government incentives, market size, and profit margins.  By building its vans in the US, Arrival stands to receive federal credits between $7,500 to $40,000 per vehicle.  In addition, the market size of the US is substantial, with a high profit margin.

2. What are the operational advantages of Arrival’s microfactory model?

Guidance: A microfactory is a small manufacturing facility located close to markets.  Advantages include just-in-time manufacturing enabled by near-sourcing to reduce lead times and locate near major markets to reduce response time.