Microfactories – the latest trend in manufacturing

A lot is happening in the automotive industries. Many manufactures are pivoting towards electric cars while trying to establish new supply chains that would be more resilient in today’s changing environment. But there’s another thing happening – we are seeing the emergence of microfactories. One of the most well known examples is the electric vehicle manufacturer Arrival.

What are microfactories?

Microfactory is a small-to-medium scale, highly automated, and technologically advanced manufacturing setup, which has a wide range of process capabilities. Typically, it is a manufacturing facility whose output can be scaled up by replicating such setups in large numbers. Microfactory requires less energy, less material, and a small labor force, owing to the high-tech automated processes. The concept of microfactory also promotes the miniaturization of production equipment and systems according to the product dimension. This helps in reducing the size of the factory, which, in turn, needs less capital, as well as lowers operating expenses. Since the development of the first microfactory concept in 1990, it has witnessed technological advancements and has found applications in multiple commercial manufacturing processes.

Example of a microfactory - one of Arrival's microfactories
An example of Arrival’s microfactory.

How is Arrival using microfactories?

Arrival has been developing its own proprietary hardware, software and robotics since 2015 and is using these technologies to enable electric vehicle production through these unique Microfactories, which are small-footprint, low CapEx and can be deployed quickly to serve local communities.

In the company’s vision, every Arrival vehicle is going to be produced in these small-footprint, low-cost microfactories. Microfactories use cell-based assembly instead of the traditional automotive production line. They can be deployed quickly – making use of existing commercial spaces and producing any type of vehicle to meet demand.

Each microfactory will serve a city and its community – sourcing from the local area and developing custom vehicles for the region they’re in. By localizing the supply chain, microfactories help to reduce the environmental impact of manufacturing. These are all concepts that the AM industry is already quite familiar with and has been working to support.

The company is now working on the production of the Arrival car, in collaboration with Uber for the ride-hailing industry, which is expected to enter production in Q3 2023. The Arrival Car will join Arrival’s previously announced commercial products, the Bus and Van, to provide cities with a multi-modal zero-emission transportation ecosystem that they require in order to meet their sustainability goals over the coming years. This integrated transportation ecosystem will create cleaner, more equitable mobility solutions for people living in cities that Arrival believes will have a radical impact on their health and opportunities.

How does this manufacturing model differs from the traditional large scale manufacturing?

The traditional manufacturing concept advocates reducing costs by building a large factory to achieve economies of scale and mass production; however, it needs an extensive and costly distribution network to make products available to customers. Microfactory, on the contrary, challenges this concept by setting up multiple small, but high-tech manufacturing units, within close proximity to customers, which can function as retail outlets providing a customized product.

Another difference between these two models is the sales strategy. In the traditional manufacturing model, products are first manufactured in large quantities and then pushed to the market through various distribution channels, whereas, in the microfactory concept, products are manufactured only after getting confirmed orders from the customer, thereby generating pull from the market.

Arrival's microfactories is the cross opposite of Tesla's gigafactories
Arrival’s microfactories is the cross opposite of Tesla’s gigafactories.


Manufacturing technologies have evolved significantly over the years. Presently, most of the products are manufactured in large factories achieving economies of scale, and most of these factories are located in low-cost regions, primarily in Asia, and a few in Eastern Europe and South America. This has helped customers getting products at a better price; however, there are signs that this might not be the case forever. Either the low-cost labor is getting exhausted in these countries as the younger population is not willing to perform repetitive low skilled jobs or the cost has started going up significantly. In addition, the delivery delays, as well as the demands and preferences for indigenous products, are increasing worldwide. This will eventually make it difficult for manufacturers to get products manufactured at distant low-cost locations and bring them to the local market.

Microfactories are capable of providing high-mix, low-volume customized products with a high return on investment. Hence, the transition of manufacturing players from using larger manufacturing facilities to smaller, agile, and highly-automated microfactories is not very far. Some experts believe that the manufacturing technology is getting ready to embrace the microfactory concept, and the industry would witness the development of a number of new microfactories over the next 10 years.