Latest / Auto Collabs / Why Electric Boats Make More Sense Than Electric Cars with Mitch Lee

Transcript

Why Electric Boats Make More Sense Than Electric Cars with Mitch Lee · Auto Collabs

• 0:00
  Welcome to Auto Collapse. You're listening to an exclusive series recorded live at Automobility LA 2025 in partnership with Cars Commerce. All right, we are out here at the LA Auto Show Automobility Day here in LA.
• 0:15
  But we're talking about boats here with Mitch Lee, co-founder and CEO of Arc Boats. Mitch, thanks for hanging out with us, man. Hey, thanks for having me. I'm excited to chat. All right. This is actually...
• 0:23
  Uh, don't tell all the other people today, but I'm kinda most excited about this chat because I just think it's, it's, it's, like, pushing against the norm. But there's so much talk about electrification. Man,
• 0:33
  electric and water- Yeah... just sounds a little bit dicey to me. But tell me about why get into putting an electric motor and- Yeah... vehicle into the water.
• 0:44
  Yeah, I, I like to say that electric boats make a lot more sense to... than electric cars. And that's not a knock on any of the electric cars out here. Yeah. They're great products. I'm glad they exist.
• 0:54
  But you look at the marine industry, and it is way further behind than automotive industry is. Like, gas cars are pretty reliable. They're quiet. They're convenient. Gas boats are closer to gas lawnmowers.
• 1:06
  They're- Interesting... these, like, super loud, noxious things. You know, they break down all the time. They're unreliable. When you go electric, you solve a lot of those core pain points with boating.
• 1:16
  Like, the, the saying in the industry is the best days of a boat owner's life are the day they buy it and the day they sell it. [laughs] And, and that's because of the maintenance headache. The maintenance. Yeah.
• 1:23
  Yeah, exactly. Well, I, I, y- we, we were talking just a second ago that your, your, the best boat is your friend's boat, right? Yeah. Yeah, exactly. Yeah, because the maintenance, because of the upkeep.
• 1:32
  Um, so tell me about kind of the progression because obviously you can, you can go residential. You can go commercial.
• 1:39
  Um, you know, where are you really targeting solving some of these pain points that you're talking about? Yeah, so this is one of those very obvious ideas.
• 1:46
  There's probably a million people in the US that have thought, "Somebody should make, like, a Tesla or Rivian of boats," and the hard part is actually going and executing on that. So we started on the consumer side.
• 1:56
  We started with these luxury cruiser boats. We're now ramping production of a wakesport boat that's all fully electric. Nice. We're going after the fishing market next or the kind of leisure center console market.
• 2:07
  And all of that is, is building up that, that foundational technology that we need to go to bigger and bigger applications. We just recently announced an expansion into the commercial industry. Wow.
• 2:17
  We signed a pretty large deal with a commercial operator for $160 million worth of ship assist tugboats all powered by that same technology. So it, it's kind of on that ramp-up as a company right now.
• 2:29
  You know, one of the interesting things that, and the reason why people love driving electric vehicles is because you get all this power at go, right? All this torque, um, that's immediately available- Yeah...
• 2:38
  to you at the accelerator. Is there a similar, like, practical application both on the fun and on the commercial side- Yeah... for all of that torque available? Yeah, it's...
• 2:48
  The reason people buy electric boats is not the same reason they buy electric cars. Okay. It's not necessarily for the punchy acceleration. What you get is something that's quiet.
• 2:57
  You could hold a conversation on one of our boats, not just at low speeds but also even at high speeds. Ah. Yeah, yeah. That's not something you can do on gas boats. Not, "Wah." Right. Yeah, yeah. Yeah.
• 3:04
  Uh, you get rid of the fumes, so you're not inhaling, you know, carbon monoxide or whatever- Out in the open air, yeah. Yeah. Uh, you get something that is reliable.
• 3:12
  You don't take it out of winter and, and worry that it's even gonna turn on. Ah. It's a much more reliable vehicle. It's also more convenient to charge. You plug in a boat every morning. You wake up, it's fully charged.
• 3:24
  It's kind of like your iPhone compared to you've gotta go to a marina. You've gotta lug gas cans down to a dock. Like, it's a much better experience through that. So you kind of go through the reasons.
• 3:32
  None of them look that similar to why you buy an electric car. But they all benefit from the same electric technology. Same is true on the commercial side. They care about money, and- [laughs]...
• 3:42
  electric is cheaper upfront. It's cheaper on the margin. Uh, it's, it's gives better uptime. Well, and maintenance in any commercial fleet- Yeah... whether vehicle or, or, or boat, is an extremely, of extremely- Yes...
• 3:53
  high importance because you can't depreciate maintenance. You can depreciate the cost of the vehicle- Exactly... but not the maintenance, right? Exactly. That's the, like, real raw cost on the business.
• 4:00
  And, and the downtime is very expensive if you're a commercial operator. Yeah. It's kind of like a plane. That plane being down is very expensive. You gotta go fix it. But you also need to rebook all the passengers.
• 4:09
  Like, if, if everyone's showing up- Yeah... you know, if you're a cargo ship coming into port, you need somebody to take you into port. And if a tugboat's down, that operator needs to go pay somebody else to do it.
• 4:19
  Yeah, yeah. So it's very expensive. So why did you get into boats in the first place? What... Are you just, like, a boat guy- Yeah. [laughs]... or, like, what is that? I, I grew up as a boater. Yeah.
• 4:26
  I grew up to parents that were boaters. I, I mean, my love of the water stems from a very young age. But I also got a degree in mechanical engineering. Okay.
• 4:34
  I spent a while of my career as a software engineer, and this is kind of that blend of personal passion with experience on the mechanicals and hardware side with experience on the software side. That's really cool.
• 4:44
  All right. So, uh, when... One, one of the questions that I have is, like, how, how is the battery situated? Because batteries are what make electric vehicles- Yeah... extremely heavy, right? Yep.
• 4:56
  And heavy and water- Yeah... and floating- Yeah... is a, is a question mark. Like, how... Like, give us a little bit of the inside scoop into the mechanics, the- Yeah... the powertrain of the thing. So
• 5:07
  I'll start with boats are very good at floating. Okay, yeah, yeah. They can carry a lot of weight. You think about cargo ships. Cargo ship, yeah.
• 5:13
  The reason that we move them over the water is because water's really good at holding a lot of weight. Yep.
• 5:17
  So starting out, we're not as weight constrained as you might actually be out with a car, that you- Interesting... you don't want that car to be too heavy. It, it's, you know, consumes a lot more power to move it around.
• 5:28
  So that's already a good starting point. Now, a lot of people talk about do batteries and elec- water mix or, you know- [laughs]... electricity and water. We're in lovely LA. It might rain today.
• 5:39
  All of these electric vehicles are gonna- Yeah, yeah. They're out here... get rained on. Yeah. They ford rivers. You know, they go through car washes.
• 5:44
  It's that same sort of technology that we apply on our, on our boat to keep them safe and keep them, uh, reliable even in a water environment. That's awesome. Well, Mitch, I'm, I'm, like, thrilled- [laughs]...
• 5:55
  that you're doing this. I think it's really, really cool. And I, I, I'm might be a boat guy now- [laughs]... that I don't have to maintain the thing like crazy.
• 6:02
  We're, we're converting a lot of people over to boat people. [laughs] Yeah. What's... Is, is there... You know, in, in EVs, at least initially, there was a big cost difference, right? Yeah.
• 6:11
  Is that same cost difference there, or y- are you kind of in line with the, the, uh, like a, like a gas-powered boat? Yeah. We, we owe a lot of where we're at today to the automotive industry. Okay.
• 6:20
  What we're really doing is taking all the technology from- All the learnings... f- the learnings but also the supply chain, the, you know, power electronics, some of the high voltage components.
• 6:29
  We're, we're borrowing a lot of that from the automotive industry, and that gives us a running start into the marine industry. Yeah. So off the line, the Arc Sport is directly cost competitive with other wakesport boats.
• 6:41
  Got it. The same will be true when we enter the fishing market. When you get up to the commercial market, it's actually cost advantage. It's actually a lower price than- Wow... combustion technology already.
• 6:50
  So it's all thanks to the automotive industry. We're taking that technology and, and off to a running start.
• 6:56
  Well, I, I can probably tell you that there's a ton of people in our audience, there's dealers that love boating. There's OEMs that love boating. Yeah.
• 7:03
  So you might get a couple of orders coming down the pipe, and, uh, maybe yours truly will be doing it. Uh, so Mitch- Yeah... thanks for hanging out with us today, man.
• 7:10
  Uh, I'm, I'm glad to have shared this, and thanks for having me. Yeah, absolutely. Thank you for listening to this LA Auto Show session brought to you by Cars Commerce.
• 7:18
  At More Than Cars, we're obsessed with uniting people around one big idea: to make retail auto an industry that people fight to join.
• 7:25
  If that resonates with you, head over to morethancars.com to check out our daily email and explore our full list of podcasts.