ARC receives its first major orders for electric tugs worth $160 million

If you’ve heard of ARC Boat, a Los Angeles startup founded in 2021 by former SpaceX employees, then it’s probably you’ve seen its sophisticated sports boat. However, the company has also been pushed into a much less attractive world of tugboats, and now has its first big order. That’s worth $160 million.

The company announced Wednesday that it has signed a value agreement with Tag and Barge operator Curtin Maritime. The new hybrid electric tag is expected to collide with waters around the Port of Los Angeles in 2027. Curtin ordered eight tags for about $20 million each.

Specifically, these are known as ship-assisted tugs and help to fine-tune huge cargo ships coming and going to major ports like Los Angeles.

ARC CEO and co-founder Mitch Lee told TechCrunch that these types of tugs are “a torque-generating machine, and this is really cool.” However, the standard version comes with a monster diesel engine that “sprays sulfur oxides, just by spitting out black carbon,” causing damage to the surrounding environment and risks the long-term health of the crew who will make them work.

Lee said these types of tags are some of the worst poisoning vehicles on the planet with linear foot. By replacing diesel power plants primarily with batteries and electric motors, using hybrid systems immediately can help tugboat operators reduce their contamination. This ensures that it complies with environmental regulations and is positioned appropriate for improving air quality.

And Lee expects the impact to be noticeable. Although the contract with Curtin is only for eight tugboats, Lee said there are only about 20 of these types of ships operating throughout the port of LA. That is to say, this one contract can remove a large amount of those emissions.

Replacing the main power plant from diesel to electricity can also help save space, Lee said. Just as electric vehicles tend to have more leg rooms and storage space for simpler electric drivetrains, Lee said ARC’s hybrid system allows them to throw away something like a large exhaust stack that normally takes up plenty of rooms in the tag.

He didn’t go into details about what a tug of war operator would do in that space (Lee said it could turn into trade secret territory). However, he suggested that it could mean more space for the crew’s quarters. This is worth it as people working on the tag often live on them for two weeks for shifts. Also, removal of the stack of smoke is a better view for “wheelhouse” workers, namely a control tower where tags are operated.

How it works

ARC’s boats have been all-electric so far, and the company’s ambitious mission is to electrify all vessels. The new tag will work primarily with electric propulsion, Lee said. There are diesel generators, but they are much smaller than the power plants that regular tags use. Lee said he would actually kick in to help him charge his batteries on longer trips or in places where there is a lack of marine charging infrastructure.

“There’s an option to turn on these generators if necessary. There’s no need to take down jobs or get left behind by the operator because of insufficient battery,” Lee said.

Otherwise, he said that the tackles on the short, regular mission tag are usually made to fit electric propulsion. Additionally, the design of the electric powertrain is simple, so we expect less downtime for maintenance using ARC tags. Combining that with the improved economics of purchasing less fuel, Lee said he thinks the Ark tag makes a lot of sense to the operator.

However, there is even more fundamental difference between ARC’s new products and startup sports boats. Lee cannot legally test tags. Lee spent hours whipping around the lakes and shorelines on Ark One, Ark Sports and Ark Coast. However, tugboats of this size require a special license. That means Lee cannot be behind the wheel. (He promoted the company’s much smaller “trackable” tugboats that he announced earlier this year.)

It does not dampen Lee’s optimism about the opportunity here.

“() There’s all this hype and enthusiasm about the ship’s buildings and the current ocean, and while much of it focuses on defense, this is a very important part of the economy,” he said. “All this commercial activity is held together by these tractors in the water that are pushing these boats into place, and we have the opportunity to modernize them in a truly persuasive way.”