Hyundai and Kia investing £100 million into Arrival back in 2020 looks like money down the drain as the British EV firm continues to sink – to the point that it's now threatened with delisting from the Nasdaq stock exchange.
Or is it? At the CES tech show in Las Vegas last week, Kia impressed with a line-up of modular electric vans whose promised construction methods looked very familiar.
The Korean company is proposing that its so-called PBV (for Purpose Built Vehicle) commercial range, due from 2025, can be built globally in microfactories in a way very similar to that proposed by Arrival.
Kia told Autocar that the intellectual property for the vans and their construction methods rests entirely with Kia itself, with nothing taken from Arrival.
“In the past we’ve invested in Arrival but as a financial investor. We’ve developed our own production process,” said Sangdae Kim, Kia's head of PBVs.
However, the original investment was made by Hyundai and Kia partly with the goal of exploring the idea of a flexible van platform, and the PBV range is the fruit of this, only this time with the benefit of solid financial backing to (hopefully) see it to fruition.
Kia’s concept for the microfactory is similar to Arrival’s, with a few differences.
Small plants with the capacity to build a few as 1000 vehicles a year (fewer than Arrival’s planned 10,000 annually at its Bicester site) allow localised production of vehicles specifically tailored to needs of nearby buyers.
Car makers have traditionally designed factories to build vast numbers of a handful of models, ideally more than 100,000 per year for each. That way they can maximise efficiency and enrich themselves from the resulting economies of scale.
The downside of this strategy is that these factories are very inflexible when buying trends change, when supply shocks hit or when demand falls.
Microfactories, on the other hand, are much more flexible. Being smaller, they can also be built more cheaply or in areas with reduced land availability.
For example, Hyundai in November opened a car plant in Singapore with a capacity of just 30,000, utilising some of the microfactory format.
The format itself can be traced to a paper entitled Micro Factory Retailing published back in 2000 by two professors working at the Centre for Automotive Industry Research in Cardiff, Paul Nieuwenhuis and Peter Wells.
Profitability of microfactories is an open question, given that so few have been established so far. LEVC’s taxi factory near Coventry is an example that might one day become profitable if the company can reduce the cost of the parts.
Add your comment