Arc Boats Sets Sail to Electrify the Waters: Following in Tesla’s Wake
Earlier this summer, Grant Jeide rode the waves of a 23-foot boat cruising through Northern California’s Delta at speeds of up to 40 miles per hour. But this wasn’t just any boat—it was an electric-powered vessel, making barely a whisper compared to traditional gas-powered boats. As Jeide surfed behind the boat, his passengers enjoyed the smooth ride, free from the noise and fumes of a combustion engine. This experience represents a major shift in the boating industry, led by Arc Boats, a startup with a bold mission: to electrify the waters in the same transformative way that Tesla electrified the roads.
Founded just three years ago, Arc Boats is at the forefront of this nautical revolution, starting by appealing to a high-end market much like Tesla did when it first introduced its electric cars. The company’s sleek and luxurious electric vessels, designed for wakeboarding, water skiing, and other aquatic activities, are targeted at a wealthy demographic willing to spend significant sums for the latest in cutting-edge technology. Among these early adopters is Jonathan Coon, the founder of 1-800 Contacts. Coon, who had always been skeptical about boat ownership due to the high maintenance and operational costs associated with gas-powered boats, became an enthusiastic convert after experiencing Arc’s electric models.
Coon first purchased Arc’s debut model, the Arc One, a luxury cruiser that set him back over $300,000. Now, he’s returning for more, having placed an order for Arc’s latest model, the Arc Sport, at a price of $258,000. The Arc Sport is designed for aquatic sports like wakeboarding and water skiing, catering to enthusiasts who want the thrill of water sports without the hassle of maintaining a noisy, high-maintenance gas-powered boat. Coon, who had previously rented gas boats and watched his friends struggle with the complexities of boat ownership, is now an advocate for Arc’s electric alternative, citing its ease of use, reliability, and overall enjoyment.
Mitch Lee, Arc Boats’ co-founder and CEO, shares a similar passion for technology and innovation. A self-described Silicon Valley nerd, Lee grew up in San Jose and later studied mechanical engineering at Northwestern University, where he met his future business partner Ryan Cook. Lee’s fascination with electric technology began when Tesla released its first electric car, the Roadster, in 2008. As a lover of boats, he couldn’t help but wonder when the technology would make its way to the marine industry. Years later, that curiosity became reality when he and Cook founded Arc Boats in 2021, fueled by advancements in battery technology and electric propulsion systems that made the dream of electric boating more viable than ever before.
Arc Boats has grown quickly, now employing more than 100 people, including former engineers from Tesla and SpaceX—two companies also founded by Elon Musk that have revolutionized their respective industries. The company’s electric boats are built with the same attention to detail and innovation that has made Tesla a leader in the automotive world. In fact, Lee’s long-term vision for Arc Boats mirrors Tesla’s trajectory: starting with high-end luxury models to capture the interest of affluent early adopters, and eventually scaling production and lowering prices to make electric boats accessible to a wider audience.
The Arc Sport, which is expected to ship its first units by the end of this year, is packed with technology. The boat boasts a 226-kilowatt battery, display screens, WiFi, and a hydraulic system that allows users to raise and lower the roof at the touch of a button. Additionally, like Tesla vehicles, the Arc Sport can receive software updates remotely, meaning its capabilities could improve over time as new technology is developed. One of the more exciting prospects is the potential for autonomous docking, a feature that would eliminate one of the more challenging aspects of boat operation.
The electric boating market is still in its infancy compared to electric cars. Global sales of electric boats totaled just $5 billion in 2021, a tiny fraction of the $250 billion in electric vehicle sales that same year. However, analysts project that the electric boating market will grow rapidly, reaching an estimated $17 billion by 2031. Companies like Arc Boats are positioning themselves to lead this expansion, particularly in water-centric regions like California, Texas, and the Great Lakes, where boating is a popular pastime.
Arc Boats isn’t alone in this quest. Other companies like Candela from Sweden and Navier, another California-based startup, are also producing electric boats, although their focus is on hydrofoil speedboats, which may not be as well suited for water sports. Additionally, brands like Vision Marine, Ingenity, RS Electric, and Rand Boats are developing a variety of electric-powered vessels in different styles. Despite the competition, Arc Boats stands out by focusing on both performance and luxury, much like Tesla did in the early days of its electric car revolution.
One of the main selling points of electric boats is their simplicity and low cost of operation. Traditional gas-powered boats can be expensive to maintain and fuel, with a single tank of gas often costing $300 to $600 for a day on the water. In contrast, electric boats are far more efficient and require significantly less upkeep. As Mitch Lee points out, electric boats solve many of the “core pain points” associated with gas-powered vessels: they are quieter, more reliable, cheaper to operate, and don’t produce noxious fumes. Arc Boats aims to provide a boating experience that’s not only more environmentally friendly but also more enjoyable for both the operator and passengers.
As Arc Boats ramps up production, Lee envisions a future where electric boats become as commonplace as electric cars. Just as Tesla eventually expanded from luxury sedans to more affordable models, Arc Boats hopes to lower the price of its vessels over time, making them accessible to a broader market. For now, the company is focused on perfecting its luxury models like the Arc Sport, which boasts a 500-horsepower motor capable of delivering thrilling aquatic adventures.
In the same way Tesla revolutionized the automotive industry, Arc Boats is on a mission to transform boating. With its cutting-edge technology, eco-friendly propulsion systems, and focus on luxury and performance, Arc is well-positioned to lead the charge in electrifying the waters for generations to come.
