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Their chief "strategy" officer promises cheap vehicles even if battery prices don’t continue to fall by setting up "microfactories". This reminded me of a proj

by sh87 7y ago

Their chief "strategy" officer promises cheap vehicles even if battery prices don’t continue to fall by setting up "microfactories". This reminded me of a project I knew from 2016, whose pitch to management was cheaper running costs by splitting a monolithic application into microservices. That did not go well neither for the team, nor management.

heymijo 7y ago
Both of these could be true. I have no doubt about your microservices anecdote, but I wouldn't dismiss Arrival's strategy outright because of it. Arrival may have something in common with Nucor steel and its mini mills. Legacy steel mills created steel by melting iron. This required a big, expensive blast furnace that was hard to start and stop. Nucor recognized that it could use a smaller more nimble electric arc furnace to melt scrap steel. The timeline we're discussing was '68 so think Space Race Era. The concept proved successful. Since then, Nucor has remained successful with its mini mill concept while other steel companies have faced myriad ups and downs. The technical limitations of the mini mill have gradually gotten better as well expanding Nucor's market. [0,1] Arrival is claiming that: 1) Its "vehicles won’t require things like metal stamping facilities (the vehicles are made of composites) or paint shops" 2) So that it can create microfactories situated closer to its customers Regarding Arrival's strategy, I see a similarity to Nucor. Arrival recognizes a new reality for how it will build EVs that it thinks will allow it to manufacture differently just as Nucor did with scrap metal and arc furnaces enabling mini mills. Is this a viable strategy? I don't know. To decide that I'd need to weigh critiques from people with industry knowledge. [0] https://en.wikipedia.org/wiki/Nucor#History https://en.wikipedia.org/wiki/Nucor#History [1] https://www.nytimes.com/1981/09/23/business/the-rise-of-mini-steel-mills.html https://www.nytimes.com/1981/09/23/business/the-rise-of-mini...
- sh87 7y ago
  Thanks for sharing about Nucor. Learned something new today. I understand Nucor did 3 things differently. First it used scrap metal as input and smaller electric arc furnace for melting. Meant it could set shop near scrap source and sell to local construction market saving on shipping costs. Second, they did away with unions with their smaller employee base and could pay them lesser than their counterparts could pay their unionized workforce. Third, the mini mill format meant cheaper setup cost and they could pause operations at lower operational and maintenance costs which again their counterparts could not. This makes sense for Nucor. For Arrival however, given their target is the commercial van market, I don't see what is backing up their claim to keep the cost of the car low by setting up shop closer to the customer.

by sh87 7y ago

heymijo 7y ago

Both of these could be true. I have no doubt about your microservices anecdote, but I wouldn't dismiss Arrival's strategy outright because of it. Arrival may have something in common with Nucor steel and its mini mills. Legacy steel mills created steel by melting iron. This required a big, expensive blast furnace that was hard to start and stop. Nucor recognized that it could use a smaller more nimble electric arc furnace to melt scrap steel. The timeline we're discussing was '68 so think Space Race Era. The concept proved successful. Since then, Nucor has remained successful with its mini mill concept while other steel companies have faced myriad ups and downs. The technical limitations of the mini mill have gradually gotten better as well expanding Nucor's market. [0,1] Arrival is claiming that: 1) Its "vehicles won’t require things like metal stamping facilities (the vehicles are made of composites) or paint shops" 2) So that it can create microfactories situated closer to its customers Regarding Arrival's strategy, I see a similarity to Nucor. Arrival recognizes a new reality for how it will build EVs that it thinks will allow it to manufacture differently just as Nucor did with scrap metal and arc furnaces enabling mini mills. Is this a viable strategy? I don't know. To decide that I'd need to weigh critiques from people with industry knowledge. [0] https://en.wikipedia.org/wiki/Nucor#History https://en.wikipedia.org/wiki/Nucor#History [1] https://www.nytimes.com/1981/09/23/business/the-rise-of-mini-steel-mills.html https://www.nytimes.com/1981/09/23/business/the-rise-of-mini...

sh87 7y ago
Thanks for sharing about Nucor. Learned something new today. I understand Nucor did 3 things differently. First it used scrap metal as input and smaller electric arc furnace for melting. Meant it could set shop near scrap source and sell to local construction market saving on shipping costs. Second, they did away with unions with their smaller employee base and could pay them lesser than their counterparts could pay their unionized workforce. Third, the mini mill format meant cheaper setup cost and they could pause operations at lower operational and maintenance costs which again their counterparts could not. This makes sense for Nucor. For Arrival however, given their target is the commercial van market, I don't see what is backing up their claim to keep the cost of the car low by setting up shop closer to the customer.