Arc gets its first major order for electric tugboats worth $160M | TechCrunch

If you’ve heard of Arc Boats, the Los Angeles startup founded in 2021 by former SpaceX employees, it’s likely because you’ve seen its sleek sport boats. But the company’s also been pushing into the far less glamorous world of tugboats, and now has its first big order worth $160 million.

The company announced Wednesday it has signed a contract of that value with Curtin Maritime, a tug and barge operator. The new hybrid-electric tugs are expected to hit the waters around the Los Angeles port in 2027. Curtin has ordered eight tugs — at around $20 million apiece — and Arc will build them in conjunction with Snow & Co. shipyard.

Specifically, these are what’s known as ship-assist tugboats, which help nudge behemoth cargo ships into and out of major ports like Los Angeles.

Arc CEO and co-founder Mitch Lee told TechCrunch these kinds of tugboats are “torque generating machines, which is really cool.” But the standard versions are powered by monster diesel engines that “just spew black carbon, [and] spew sulfur oxides” into the air, damaging the surrounding environment and risking the long-term health of the crews who work them.

Lee said these kinds of tugs are some of the worst-polluting vehicles on the planet by linear foot. By largely replacing the diesel power plants with batteries and electric motors — more on the hybrid system in a moment — Arc can help tugboat operators cut down on that pollution. That puts them in a better position to comply with environmental regulations and improving air quality.

And Lee expects the impact to be noticeable. While the deal with Curtin is just for eight tugboats, Lee said there are only about 20 of these kinds of vessels in operation at the LA port overall, meaning this one contract can take a big bite out of those emissions.

Swapping the main power plant from diesel to electric also helps save space, Lee said. Much like how electric passenger cars tend to have more leg room and storage space due to simpler electric drivetrains, Lee said Arc’s hybrid system makes it possible to ditch things like large exhaust stacks that usually take up a ton of room on a tug.

He wouldn’t get into specifics about what, exactly, tug operators will do with that space (Lee said it could veer into trade secrets territory). But he suggested it could mean more space for crew quarters, which is valuable since the people who work tugs often live on them for shifts as long as two weeks. And the removal of smoke stacks means better visibility for workers in the “wheelhouse” — the control tower from where a tug is operated.

How it works

Arc’s boats have so far been all-electric, and the company’s ambitious mission is to electrify all watercraft. The new tugs will largely operate on electric propulsion, Lee said, with the motors putting out over 4,000 horsepower drawn from a massive 6MWh battery onboard. There is a diesel generator, though it’s much smaller than the power plants that normal tugs use. Lee said it will only really kick in to help charge the battery back up on longer trips, or where marine charging infrastructure is lacking.

“There’s the option to turn these generators on if you need them — we never want an operator to have to turn down a job or be stranded because of insufficient battery on board,” Lee said.

Otherwise, he said, the typically short and regular missions tugs tackle are tailor-made for electric propulsion. And since electric powertrains are simpler in design, he expects there to be less down-time for maintenance with Arc’s tugs. Combine that with the improved economics of buying less fuel, and Lee said he believes Arc’s tugs will make a lot of sense to operators.

But there’s an even more fundamental difference Arc’s new offering and the startup’s sport boats: Lee can’t legally test out the tugs. Lee has spent hours whipping around lakes and shorelines with the Arc One, Arc Sport, and Arc Coast — possibly even with some of the company’s celebrity investors like Kevin Durant. But tugboats of this size require a special license, meaning Lee can’t be behind the wheel. (He has driven the company’s much smaller “truckable” tugboat that it announced earlier this year.)

That hasn’t dampened Lee’s optimism for the opportunity here.

“[There’s] all this hype and enthusiasmaround ship building, and around maritime right now, and a lot of that is focused on defense, but this is a incredibly important part of the economy,” he said. “All of this commercial activity is held together by by these tractors in the water that are pushing and pulling these boats into position. And we have the opportunity to go modernize these in a really compelling way.”