 How's everyone doing? Great to have you here and great to be with Avinash from Arrival. It's a time of heightened interest in the electric vehicle space so I think our conversation is very timely and to start I just wanted to give you the opportunity Avinash to speak a little bit about what makes Arrival different from some of the other companies that we're all reading about. Yeah so I think in the mobility space it's undergoing a rapid transition to electric and sustainable technologies and we were founded 2015 got over two and a half thousand employees all around the world and we essentially looked at the transition that was occurring and how quickly even from an environmental standpoint from a quality standpoint how quickly we needed to move to this green and green transportation. But to do that using the system that got us there in the first place with issues we see today we fundamentally thought is not the right way to continue forward. So we were able to spend the last six odd years redesigning how vehicles are designed engineered and produced so we have vertically integrated we do the software the components like the battery management system etc in-house we've removed the need for metal bodies we use a composite recyclable material for that the lighter more durable than steel and then we pioneered a totally new production method where we're producing our vehicles in what we call micro factories which are about 20,000 square meter warehouses that we can convert to production facilities in about six to 12 months depending if the building exists and we're able to deploy those locally in cities so you can think of micro factories being able to be placed anywhere in the world so we've got one in the UK one we've announced in Madrid and two in in South South and North Carolina in the US they're placed near cities they produce vehicles locally they're employed by local people paying local taxes and then the vehicles you're produced are used in the local mobility ecosystem. Yeah I think the you know the innovation of micro factories it's really interesting and you previously worked at one of the large automakers when you're at cruise what was the decision process like you know to break away from the old tradition of the the massive assembly plants so we're time backstage you know imagine kind of a supermarket sized factory producing cars what was that decision like and was it difficult kind of throwing off such a long-established tradition? Yeah it's it's super difficult and I think one of the most important things especially for the for the founders in the audience is you know we we had that vision and we stuck with it you know we we have had to engineer layers and layers of deep technologies to accomplish the ability to produce vehicles we had to totally rewrite the rules but it comes from what problem were we trying to solve so obviously we want to make cities have clean air and on a business side we had an economies of scale problem in the industry so if you travel the world right now it doesn't matter where you go you see the same vehicles everywhere and that's because the current the or should say the traditional method you have to produce hundreds of thousands of vehicles for the business to make sense so we took a look at that business model and said well why would we continue down that path if you could produce vehicles locally and you could do it at a much lower capex and a much lower vehicle cost then you could do it everywhere but to stick to that you know we were we were self-funded for the first you know three or four years of our existence and then we took on our first VC well actually was a strategic investor that invests in us so I think you know a key message here is that as founders really being able to stick to them to stick to the mission you'll have a lot of distractions along the way but really being able to understand it you know we say we say we're going from A to B but we might go via CDE and F to get there right but we're still going there yeah absolutely and what yeah what have been some of the learnings you've had along the way and maybe to get into a little more detail too about like exactly what benefits you're getting from the micro factors yeah so the micro factory first of all they're about targeted to be 50 million US dollars to deploy so we can work directly with the city we're building buses vans and cars out of a micro factory so our bus will be in trial with first bus in the UK early next year our van we're partnered with UPS and others and our car we're actually designing alongside Uber so you know we've built strong partnerships based on the fact that we can produce any of these vehicle types in our micro factory so the benefit we get is you know lower upfront capital faster rate of return we can work directly with the city to create vehicles that match the city's needs sustainability is obviously critical so micro factory lower energy footprint low water usage we don't use a paint shop or metal stamping plant so none of the tricky environmental hurdles that you have to go through none of that exists when you fundamentally redesign how you produce vehicles and the other benefit is it uplifts local communities so we've done a study with the city of Charlotte where we had about 150 odd million per year to their GDP so when you're hiring local folks to produce the local buses or vans and cars that the city will use you've obviously got a really nice circle of reciprocity there and what have been some of the lessons you've taken along the way you know for anyone else who's thinking about physical manufacturing and the possibility of smaller factories help them skip a step I think like I said we had to we had to design a lot of technologies that didn't exist before and we pulled a lot from different industries as well so you know if anyone's out there really looking at transforming an industry whether it's healthcare or food and beverage or farm tech or whatever and really pulling across different industries and finding innovations so for example you know we have to design a whole new level of robotics in our in our micro factories so we've got folks from NASA actually that work for us and looking at doing that when it comes to the composite material so instead of steel for our bodies we use a polypropylene glass fiber it's a composite but it actually pulls from the textile industry so if you come to one of those factories you'll see the material being weaved like you would weave a shirt and then we use our process to turn it into a panel that's more durable than steel but a lot of the technology is coming from innovations found in other industries brought together to really disrupt the automotive industry so I think you have two micro factories currently deployed one in the US one in the UK so very nicely geographically split but how do you think about the regional opportunities and when you're strategizing for the next you know dozens of micro factories that you're planning where you'll place them yes I fundamentally believe that if we're gonna solve the climate crisis everybody needs to go electric there's no point you know UK Europe US all shifting to being electric and then the rest of the world basically lags behind and if you think about you know how this actually works right so a lot of the times when you're traveling to developing nations you're actually seeing second-hand vehicles that are coming from more wealthy nations that have been sort of used to a point of depreciation that then the other nations purchase if we're all going to clean up the world then vehicles electric vehicles need to be affordable for everybody so one of the first things that the reason we design these technologies in this way is so that we can make the price point competitive with the fossil fuel equivalent that it's taking on you know wherever it's our bus our van our car and beyond so once you've done that you're able to bring everybody alongside but then you have to really look at well what does that mean for the business case so we've doing some pioneering things in the vehicle like the vehicle is upgradeable in hardware and software so that means if you're upgrading the hardware as well you're increasing its residual value of the vehicle at its end of its life so the delta between the initial purchase costs and what you can do with it later because you're refreshing it all the time from hardware and software the economics change so now you can look at the business model and say well even if you might not necessarily be able to do the initial capital purchase we can create a business model that allows you to access an electric vehicle and then at the end of life we can refresh that vehicle so you know these innovations transform not just the initial product but the whole business model around it and so when we think about deploying micro factories we think about putting them everywhere I think every city around the world so our our micro factory building builds 10,000 vans a year as an example every major city in the world can support you know 10,000 vans a year and more and so we can literally just work with the local city and say we can bring a micro factory to your neighborhood and because it's only six to 12 months and it's green tech you know we can get going really quickly so we've announced we've actually announced four three of them come online next year but the opportunities for micro factories you know they're really endless I mean we want we want to have this local production facility everywhere it'd be great you know if Helsinki had one and the buses and the vans that are used here in the cars are being produced locally yeah I was gonna ask I think it's a classic kind of question about the electric vehicle space but in terms of the timelines that you're looking at because you have interesting opportunities with public transportation with shipping and delivery how soon are we talking about that you know public transportation fleets could be you know adopting arrival and mass I would say a lot quicker like with any disruptive tech it normally takes longer for it the transitions to start it doesn't matter what it is you know I mean I'm seeing a lot of amazing in innovation in healthcare for example right it takes a long time to start but once it starts it transitions really quickly and I think in the automotive industry we've actually seen that already there is not one city that we talked to that doesn't want an electric public transportation system for example there's not one customer large fleet owner that we talked to and small fleet owners that don't want to shift to an electric vehicle so I think that we are ultimately now already limited by capacity rather than demand you know so mentioned UPS have ordered 10,000 vehicles from us with the option for 10,000 more that's just one example you know we're seeing that everywhere what do you want from governments that you're not already getting I think it's important that we don't build whatever industry we're in we don't build an industry that relies on subsidies and incentives right so because you that can essentially be a crutch to a barrier to entry for a lot of startups coming in as well because now you know the big players are able to sort of offset their costs through government incentives I think it's important that especially startups we create a business that allows us to compete with the bigger players through either cost experience or you know whatever our unique proposition needs to be for arrival one of the key was that we need to produce an electric vehicle that's at a competitive price point with diesel but we need to bring better product attributes so we need better payload we need better cargo volume efficiency a better range whatever that is and we need this technology to be sustainable that way when a purchase manager is making a decision for a commercial vehicle to purchase with a rival they're making the right decision for their business the planet and the people and the subsidies can aid that and make it even more attractive but that's not the reason the subsidy is not the reason for the purchase and so you know we are driving towards that point where it's just a better product at a better price and it's green so why wouldn't you and once that has happened then I think the possibility is there endless so see recently de-spect I think it was March and and there's a bit of a hiccup I guess in early November you said that production next year was gonna be a little slower than expected and so I guess I was just curious to ask kind of what changed in the calculus you know what what kind of was the surprise there yeah I think what we're doing is hard when you're reinventing a whole industry it's hard but I think what's important is production hasn't changed the start of production hasn't changed our vehicles we're on road in many of the vehicles already like we have vans in Dubai at the expo with UPS now with first bus early next year public road trials begin we start production for our bus in Q2 we start production for our van in Q3 what has changed is simply the ramp I think when we initially thought about that ramp 12 months ago we it was more aggressive and as we're going through it which is you know normal for any company as they as they're starting to get closer to this data production or product launch as we looked at it we thought well let's take a bit longer to ramp capacity so start production take a bit longer to ramp capacity make sure it's really ironed out because then the blueprint is there and then when we push scale you we can just start deploying all these micro factories rapidly so you know for the founders out there I mean and even the VC's that that patience is really important because if you're going to disrupt something things will change and what you think you're going to do as you start doing it it will change and that's okay and I think it's just a regular part of I think launch but I think the key thing is technology is developed starter productions where we expect it to be and then we're just going to ramp it up a little bit more pragmatically before we really you know push go on scaling and maybe that speaks as well to you know some of the differences between hardware and software and I know you do both but you can update an app but updating a door is a little more complicated once it's off the assembly line hardware is tough there's no doubt hardware is tough but you know there's a lot of impact I think when you can combine the two we're seeing this in in in many different fields you know you know gaming is really interesting one where they sell the hardware at a loss and make it up on the software and so on so I think there is you know quite a bit of opportunity but I think we were talking about this backstage what's interesting is we've we started with being self funded and then we got a private strategic investment and then we went public for a SPAC early in March we're actually UK's largest tech IPO ever which was very humbling and we recently completed a capital raise in the public markets and if I can if I can just share my insights on that you know when we when you're private and you're doing the investment rounds the investors are really getting a lot of time to get to know you and going really deep in your business model so if you're at that stage of your business from my experience it's really important to be very clear what in the next 12 24 36 48 months look like obviously as you get further out it's going to be less defined but really being clear on you know what you're going to market strategy and then had you expand your business and the investors are going to look at that and they get to really pull the lid off and really get to know your team because at the end of the day investors going to invest in your team I was on the other side of the world at General Motors we're looking at a range of startups I've done other startups myself and you know we would always look at the team so the team is going to be critically important but also really being clear on how do you get there when you're on the public side though it's really about what you're doing like right now today and the investors get I would say less time you there's a lot of forward-looking statements that you just cannot make right legally the structures not like that so you're really focusing on okay what are you achieving now and the other big difference is that in private you're really balancing the investment quantum and your valuation but those two things are going to be moving around as you go through the deal and really understanding your valuation I think is important and how you justify the valuation through comparisons with other startups or appropriate percentage of the TAM being very clear on valuation and understanding how willing you are to move on it is very important in when you're private when you're public the valuation set you know so that side of the deal is easier you know people either want to come in at a certain share price or they don't so you know when you really look at it private you have take the opportunity to get to know the VCs especially ones your investors if you if you have them already really let them understand what you're doing and how you're going about it because that's the easier part the more difficult part is the negotiation on what your valuation is going to be the flip side when you're public you're going to get less time to really talk about where you are going to go in a very direct distinct clear way you have to be a little more careful there and focus more on today but the actual raising part is relatively straightforward because you know those parts are done for you yes so arrival you know along with the recent equity fundraising that you did on the public markets there was also a green bond issuance roughly three hundred million dollars I think a lot has been made about investor interest in sustainability and so I was curious just to hear about that process you know how it differed from a traditional bond offering did it wet your appetite for more yeah I think so we we in total we raised another 640 million I would say for an automotive company the capital that we've raised we're extremely efficient you know we invested about 900 million to date we've raised another 600 odd through the SPAC we've got some obviously cash on hand too so what was interesting was demand far exceeded what we had set our raise that and we we basically maximize it to the to the most we could the demand was significantly higher even than what the 640 that we raised and what's interesting about it is on the green side you know it's essentially almost split half and half between common equity and and the converts the green investment is real like the money is coming in but I think it's really important to separate how those proceeds are being used is your company really focused on ESG or are you just trying to do something so you can get access to that capital and I think you know even the VC and the and the and the large investment funds are still trying to figure that part out but the the money is is rolling in and the investment the appetite is there I believe that every company should have ESG baked in to what they do not as a strategy it's it's it's part of what you are it has to be part of your products so for us you know making sure that we recycle the batteries but you know in our industry it's kind of like this sort of dirty secret that everyone focuses from the cell forward because that's the nice part you can talk a lot about all of the green technologies and everything we're doing but there's a whole stuff that happens before you get the actual battery cell that not enough people are talking about and going out and attacking those problems as a real part of your company so it has to be real make it part of it it's it's not just about you know being good for your business but obviously for the planet I mean we're at a stage where companies are they're not just profit-generating machines they're also meant to serve the community so if you have a strong ESG focus in your business whatever it is you will be able to to find investment around that definitely and do you feel like it opened up opportunities for you they wouldn't have had otherwise yeah I think ultimately it was so we were we're green by nature in terms of what we're doing you know electric vehicles local production uplifting local communities affordable vehicles so I wouldn't necessarily say it opened up new opportunities we're already having conversations with the governments and operators around the world but I would say that you can see that the accelerator pedals being pushed down no pun intended but the point is that now the investments coming in so now it's up to the companies to actually go and do something right and I think that is really what's evolving now it's this sort of okay we're getting in there let's go and so I think it it just sort of reinforced that this transition at least in in community the minds of people it's already happened and now there's like that we got to make sure that the lag for when the when the innovations come isn't too great because then the patients will run out so we've got to be really moving forward and I think I think we're just gonna see a lot more investments in this space and the automotive industry notoriously complex notoriously expensive will you have to come back for more financing sometime soon I mean what we'll what we'll do is we'll look at that based on where we are as a business I mean we obviously want to scale really rapidly so right now our focus is on we've got the start of production for the products next year as we get the micro factories ramped up I mean the sky's the limit and we can literally deploy them in warehouses doesn't need any special building we can put them anywhere in the world and so when we scale it's always gonna be a balance between how fast we want to scale versus how much capital we want we need and and you know we'll make that call as we go through the coming 12 and 24 months but make no mistake I mean we we want to scale we want to scale rapidly and maybe it's because I'm a Europe tech reporter but I am always interested in ways in which you know Europe has a kind of a leadership position and so I guess I was curious like do you do you feel like there anything particularly attractive about Europe in terms of you know government support or you know the labor force when you're when you're looking at where you want to build and sell your vehicles talent you know talent across Europe is amazing I personally don't you know we've got a headquarters in US headquarters in UK we're in Amsterdam Spain Germany but I don't see us I just see us as a global company I see the talent pool as just everywhere if you're if you're good at what you do I encourage you to come and work for a rival basically but obviously governments in Europe when it comes to to transition to green technologies I mean if they're forefront they're leading that discussion so yeah absolutely but I don't think that talent is concentrated in any one area that makes it any special than any other area investment is in case of Silicon Valley and some others but not talent yes it may be the last question there's a brief moment where arrival was lighting up a little bit on Reddit so I was curious curious to ask what I was like being you know a meme stock on the other side so funny story we're arrival yeah we were a meme stock the dentist the founder and I actually joined or read it and then he got kicked off because no one actually believed it was him but we're on there and we're trying to engage the community I think I think this is just the norm now you know the retail investment through fintech platforms they're just as engaged and involved in your company as the large the large traditional investors and I just it's I think it's very important though that it's not just about following a trend because then there's real people that can lose real money and I think that education piece needs to happen and that's why we're on there so if you if you want to learn about arrival we're trying to engage with the community based as much as we can say obviously on the topics to help them get a better understanding and make a decision but I just think that's you know another unique thing about us we'll be out there chatting chatting to people you might find an interesting photo of me with a orange and a spoon if you check out Reddit all right now you know how to find Avinash next time yeah I think our time is up but thanks everyone great conversation thank you thank you Avinash thanks