The Future of Electric Boats | Mitch Lee, Arc

0:00It's truly hard to convey how far behind the marine industry is. Don't think of gas cars. Think of gas lawnmowers, gas leaf blowers. You look at the electric version of that. It's a very simple system. We are not taking market risk and we're not taking technology risk because automotive has solved this. What we are taking is execution risk. We need to actually go put these pieces together. And that is really hard. This is Mitch Lee, and he is the co-founder and CEO of ARK, which is an electric boat startup here in LA. Do you want to just talk about, you said you basically got the first boat finished and like shipped within the first two years of founding the company.

0:37How'd you do that? It's a fair question. Uh, I mean, if, if you break the problem down of electric boats, well, actually let me take one step back and just say electric boats are a very obvious idea. So all of our focus is just on executing that very obvious idea. We're making better boats. We're borrowing technology from the automotive industry. We just need to repackage that for the marine industry when we first started we're like okay step one build a battery pack that's it's kind of like the the foundation of what we're doing but then you're like all right well these battery packs are pretty big uh pretty heavy pretty expensive in order to compensate for that you need to actually build a boat around the battery pack so that unlocks a second order problem we're like all right now we've got to build the boat and the battery pack and then you're like okay well how do we do that well we need to go get the team for it So a lot of our team was ex-aerospace and crewed that team.

1:33And it was just five or six people. We built this very quick and dirty boat that we called V0.1. It was just like an aluminum rowboat almost. Dropped a battery pack in it, did a lot of the early validation on that. And that was within months of starting the company. And then we built on that and continued to expand the team, continue to work on how do we refine that into something that's a little more polished into something that looks a little more customer ready. And it's just focusing on really fast feedback cycle. So again, like, how do you break those problems down into their component parts?

2:10Yeah. How do you take it one small problem at a time and just do that as fast as possible, as many times as possible. And two years later, we delivered the first arc one to a customer. Yeah. Is this one of those things like I know when, you know, Tesla was started, like the lithium ion batteries weren't nearly as good as they are today. Is this one of those things like you started this in 2021? Could this have not been started even like a few years earlier? Exactly. This is I mean, if you tried to start this, even a few years earlier, you would almost necessarily have to do your battery packs in house down to the cell level.

2:42It would be a massive upfront expense. A good example of this is when we started ARC, there's this we wanted to run an 800 volt system, really important because boats consume a lot of power and so you want as high of a voltage as possible that was cutting edge at the time now a lot of automotive companies have started shifting to 800 volt systems up from 400 volts but at that time it was cutting edge there was one component that we could buy off the shelf that would take 800 volts and step it down to a lower voltage system a dc dc converter now there are 25 options if not more and that's the amount of progress that you've seen over just the past five years but again had you rewound three or four years that one component wouldn't have existed you would have had to build that thing in house that would be a multi-million dollar project alone just for that dcdc converter so going from like the v000 which is just the aluminum on the outside to like actually the first shibbol product like how did you think through that we just broke it down to its component parts so again step one is make something that floats that is lightweight and strong.

3:51Step two is propel that boat with electric propulsion, with electric power, like battery packs and electric motors. Step three is go layer the software in to actually control all of that. And then step four is make it aesthetically pleasing. Make it something that somebody is willing to spend hundreds of thousands of dollars on. That last step is actually probably one of the bigger challenges we've faced because we've got a bunch of insanely talented engineers, none of whom have made really nice fit and finish products before. They have all worked with strong, lightweight structures and electric systems and high voltage power electronics and those sorts of things and not upholstery.

4:34Yeah. And did you have the same situation where like, I think you've been trying to kind of follow the same Tesla master plan of start, you know, at the high end with the Roadster and then kind of go downwards? there are parallels but i the marine industry is different one of the ways it's different is if you look at automotive where like take the sedan market right you've got your honda accords your nissan ultimas this like economy class of sedan and then you also have this mercedes s class the tesla model s like premium sedan tesla started in that premium sedan category which is a smaller volume and then they move down market into the larger volume into the model three the model y marine is different marine is you know the people buying boats are people that have lake houses or live on the water so by volume like you take the wakesport market by volume the premium boats are uh a larger portion of the market than your entry starting starting out high is just like the general market kind of thing.

5:42Yeah, so when we are entering the premium market, it is not only the highest price point, but it's also the highest volume. There's not a huge incentive for us to go down market from there. Instead, what we're doing is going laterally. So we're going across all these different markets. So starting with premium wake-sport boats, now we're going after premium center console boats. We might in the future go after premium, you know, other consumer boats. Don't want to reveal too much. And then taking that same technology and actually going up a power curve, going from a 500 horsepower system up to a thousand horsepower system, up to multiple thousands of horsepower.

6:20Let's just get into like, why did you start the boat company in the first place? Like what, what brings someone to start an electric boat company in the first place? Well, for one, you need to be naively optimistic. Uh, you need to look at this problem and say, this is a very obvious idea and we could do it. And then you get into it and And it turns out to be a lot harder than you ever imagined it to be. No, it comes back to I have a personal passion for boats. I grew up on the water to a family that loved being out on the water. My parents took us out every weekend over the summer to first learn how to kneeboard, then water ski, then wakeboard, and ultimately into wake surfing.

7:00That's kind of one part of it. And then the other part of it is I have a degree in mechanical engineering. Then I pivoted over to software. And so I've got this blend of experience across both software and hardware. And over the course of my career, I've been lucky enough to work with some insanely talented people. My co-founder being one of them, Brian. And when you look at an obvious problem like this, when you've been in a Tesla before and said, wow, this makes a lot of sense. And oh, by the way, it makes even more sense to go do this for Bose. it solves even more of these acute ownership problems for boats somebody just needs to go do the hard work to like bring all the pieces together then you look around at that network and you're like well hey i know somebody that's incredibly talented at structures and uh you know engineering like systems engineering and i also know somebody that's incredibly talented at software engineering and like you start putting these pieces together and yeah i know i know for like uh me especially with like trucks i'm so happy that diesel is going to be kind of phased out using electric is this the same situation with boats where it just smells fucking horrible it makes so much more sense than automotive i really try to break the analogy with automotive because it's like gas cars are very good at what they do they're quiet they're fuel efficient they're low cost they're reliable they can last hundreds of thousands of miles they are the byproduct of a century of investment by world-class automotive companies like GM and Ford.

8:36Electric is a better option there. It's got better software. Tesla has really proven that, I mean, there's a reason the Model Y is the best-selling car in the world. But it's up against stiff competition. Now, you look at the boating side of this, gas boats suck at what they do they are like the analogy i give is like don't think of gas cars think of gas lawnmowers gas leaf blowers these things that are very loud because you're exposed to these big combustion engines so they're very loud there's no like sound dampening that there's no enclosed cabin around you they are uh they've got these fumes coming off of them again same thing you're just like surrounding just lowers your iq by 10 points every time you take a boat ride yeah like all these boats come with carbon monoxide poisoning stickers on the back because you're just exposed to those fumes directly they're unreliable because they're sitting in a highly corrosive environment then you've got to winterize them because you can't just have fuel sitting for long periods of time or it starts to separate and then you have these huge maintenance burdens against them huge reliability concerns with them like there's very few redeeming qualities about owning a boat which is why in the industry you get these sayings like the best days of a boat owner's life are the day you buy it and the day you sell it yeah now you look at the electric version of that it's a very simple system you've got an electric motor a hermetically sealed battery pack that's about it and when you're out on the water is it basically just completely silent it's quiet yeah what what you end up starting to hear is the wind in the water like the noise of the propeller in the water or the wind's kind of rushing by your face that's a much more enjoyable experience and you can hold a conversation at 35 or 40 miles an hour whereas on a gas boat you can hardly hear yourself think at that speed so you get that and then there's no fumes and you could talk to the people surfing behind the boat and the reliability goes way up and the cost of operating it goes down because your electricity is you know better cost of electricity is better way lower i know that for like a yacht i think it's some ridiculous like tens of thousands a day or some crazy amount for fuel cost yeah i mean yeah these larger boats go through thousands of gallons yeah it's they actually get boats are closer to planes than they are to cars when you get above a certain size they start measuring and how many gallons per hour you're consuming rather than miles per gallon because it starts getting into like small fractions of like you know you might go 0.1 mile to the gallon sort of thing uh so they're very fuel consumptive and then in even non-intuitive ways it starts making more sense a good example of this is boats a lot of boats are like point a to point a they start and finish at the same spot, which means that you can plug them in and every morning you just wake up and they're ready to go.

11:38And that's a way better experience than having to drive to 30 minutes to a marina, burn a bunch of fuel on the way there and the way back, pay$8,$9 a gallon at that marina for hundreds of gallons or lugging gas cans down to a dock. If you're talking about a smaller boat and you, you know, have to go out to the gas station, fill up these gas cans, then carry them down then fill up your boat versus you know just again plugging it in a lot of marinas already have power docks already have power to them so even the charging problem is way easier then you get out on the water and you're like great well i'm on a gas boat and my fuel gauge goes like this because the fuel sloshing around i don't actually know how long i could go on this thing they haven't even solved that no this is like this is the opportunity when i say that we are not taking market risk, it's because what we're delivering to the market is a fundamentally superior technology, a fundamentally superior product.

12:38And we're not taking technology risk because automotive has solved this thanks to these world-class automotive manufacturers that are putting 10 % or more of their revenues back into research and development, establishing these supply chains. What we are taking is execution risk. We need to actually go put these pieces together. And that is really hard. Like we've been at this for four and a half years. Yeah. Recruited this insanely talent dense team. We work around the clock like with with an intensity that is hard to match. And we're still just kind of at the starting point of this company in terms of the potential in front of us.

13:15We've got we're scaling production of a of a wake sport boat. We've announced our expansion into center console markets. We've announced and have started making strides on the commercial space. So, I mean, we're just at the early innings here, but that's four and a half years in. Yeah, I know. I know when I was just arrived this morning, one of your sales guys said that he was actually going to take one of the customers that was going to come buy a boat just around the factory to see how everything works. Did you, for the initial sales, did you just like bring people to where you were building these things and just show them everything that you were doing?

13:49How did you do that? One of the biggest problems that we have still to this date is we are massively constrained by the number of boats that we are making. Yeah. So we've got more demand than we can supply with boats. And also our sales team is like, hey, I want to be able to show people the product. We're like, great. Well, you're in competition with customers who have bought the boat. And so we're just kind of everything funnels back to we need to build boats faster. Yeah, that's now we get creative in the interim by bringing customers by for the factory and we'll have them sit on a boat in the factory.

14:22that's nearly complete about to go to a customer or something. And it's just getting creative to solve that supply constraint. And how did you actually get the first few customers? Did you bring them out on the rickety little thing on the water? There's kind of a standard wave of adoption. So the very first customers we had just wanted the coolest new technology. They were willing to buy almost sight unseen. They were just like, that sounds awesome. Just some rich guy that wants a boat. Exactly. that you phase out of that group pretty quickly and then people are like look i'm i'm willing to spend up to get something new i like the fact that this is new and cutting edge technology and then you phase out of that pretty quickly into a group of people that are like i'm looking at a gas boat versus your boat and it needs to compete on merits they need to be the same price and your boat needs to be better performance higher reliability like all these things that I really care about.

15:17It needs to throw a really great wake if we're talking about the ARC Sport. So, and we're at that stage where we are competing on the merits of the product. You don't need to know that this is an electric boat. You need to know that it's lower maintenance. It's cheaper to operate. It's more reliable. You're not going to run out of fuel out on the water because you can go hundreds of miles at low speeds on an electric boat. Like you need to know all of these things. The software capabilities are, I mean, just light years ahead of where the industry is. It's a little bit like the Tesla versus like Mercedes where the map doesn't even work.

15:50Exactly. Like where you kind of got this small little GPS unit and then suddenly you come along and you're like, wait, this thing kind of drives itself. That's pretty cool. You're basically doing one boat a week. You want to be doing a couple boats a week pretty quickly. Yeah. What is the like biggest constraint to actually doing that? Is that just like the tribal knowledge of people understanding how to do this? Is it like factory space? What's the issue? We started this year at basically zero boats a week. and we've been slowly ramping up so maybe it was a boat a month at the start of this year and we've been pretty quickly ramping that up now the way that you ramp production in marine at least the way we want to ramp production looks different than what you do in automotive automotive turns on production at a much faster rate because it's a lot of robotic assembly the downside of that is you have to spend an insane amount of money to go be able to turn on production at multiple vehicles a day sort of thing.

16:46The labor side of that looks very different as well. It's, like I said, a very robotic assembly line. So if you're Tesla, you're making a car in, call it, 15 to 20 hours of labor for this super complex vehicle. And it's because robots do the rest. In marine, you're talking about hundreds of hours of labor per vehicle. Now, what that means is it's, again, very labor intensive. In order to ramp production, you then have two options. You either staff up a lot, so you have a lot of labor, or you make that labor a lot more efficient. We want to make our labor a lot more efficient because that has two effects.

17:28First, it speeds up production. The second is it increases your margin over time. that has been really the the rate limiting factor of our production ramp is we're not just going to throw more people at this we are going to make every person we have twice or three times as productive so how have you actually done that like what is what are those efficiencies yeah it comes down to tooling so better well actually let me let me take a more approachable example here imagine production is an ikea like assembly process you go buy ikea furniture you open a box you have a bunch of parts there's some instructions associated with it now if you think about how do you start getting better at ikea furniture assembly one is you actually just like do it a few different times and the third time you assemble that same piece of furniture you're going to be more efficient you kind of understand what's going on but the other part of it is like the instructions for assembling that furniture need to be good, need to make sense so that you're not accidentally putting the wrong screw into the wrong place or assembling something backwards.

18:33So that comes down to work instructions. The third is you start specializing a little. As you try to think about assembling that IKEA furniture and you're now trying to get to, hey, I'm assembling one by myself to I need to be assembling like 10 a day or 100 a day, you start specializing and you're like i'm only responsible for this one step same thing has happened with us we have specialists now doing composites and specialists doing final integration and specialists you know in all these different parts then you start building tools and you're like all right well this thing is super annoying because like i have to like lift this thing manually and uh have to drill this part or whatever so you build a special tool that makes that fast.

19:20So it's those same sorts of problems. And it's the accumulation of all of these little things that that happened that make you better and better. The last and final thing that is incredibly important is if you are changing things a bunch, imagine assembling that same Ikea furniture and every single time you pull it out of the box, it's slightly different. It'd be such a massive pain in the ass. It'd be a huge pain and super inefficient. So at some point you also just need to finish designs so that you could walk those designs in and start optimizing a process behind it um so i guess coming back to the original question we started about a boat a month uh we passed through a boat a week we're we're past that now by the end of this year we want to be at three boats a week wow and and then you know continue to ramp from there again doing that wall i mean we've we've expanded margins dramatically over that same period of time.

20:14So it's not just that we have six X production or eight X production. Each boat has become like way more profitable. Exactly. Exactly. Okay. So like this, this is a very rare case where you are actually like ramping. I haven't talked with very many founders that are genuinely ramping production of like a massive, you know, piece of equipment thing. Um, how, what would have been the biggest like production hell experiences going from like no boats in January to like one boat, you know, one boat a month to like three boats a week at the end of December. Going back to that same Ikea analogy, people think they'll ask this question of like, hey, what makes production hard?

20:53And the answer is it's no one thing. It's a thousand small things. So you go back to that Ikea example and you're like, all right, I got everything assembled. I'm like, you go to reach for that last screw. And if that last screw is not there, everything stops and you can't finish the assembly. And like that is so frustrating because you've got thousands of parts on this boat. It's this giant piece of like complex machinery. And if one part is missing or one part is not in the right place at the right time, it could stall everything. Yeah, Elon talked about this where he basically said like with a car, you have to have, there's like 10 ,000 different parts in the car.

21:27And if any one of those parts is like doesn't happen at the right time, it's the bottleneck. And suddenly it stops production of everything. And so getting that entire system going where you can like every single part is in the right place at the right time without being massively overstocked, without also saying, all right, I'm going to go have to buy like all of these parts way in advance because that also destroys the business is really hard. It's an incredibly hard orchestration problem and is no one problem along the way. It's again, it's the thousand small ones. Yeah. And I think, do you know Jim Belosick from Sink Ascend?

22:04Yes. Okay. So he talked about basically like there's different kinds of materials. And sometimes it's basically planning for these like unforeseens where someone will ask for something. And suddenly, you know, you have to not only plan for what the expected production is going to be. It's also like the spikes and stuff. Yeah. Do you also have that some kind of thing where you're keeping much more, you know, inventory, at least in the early days before you have a ramped production? We're fortunate in that we operate with a pretty heavy demand backlog. so the only thing we need to be concerned about is how quickly can we ramp up production right now at some point you every production system needs to enter a poll base meaning demand is polling on production is setting the forecast for production to go hit right now that's just demand the demand signal to our production system is go produce as many boats as you can because we've got the demand for it at some point that will flip and and you'll say like hey what does demand actually look like maybe there's some seasonality impact maybe there's like some supply shock that we want to be uh careful of because we're sole supplied on this and so you've got to carry more of that today we don't have any of that it's just go build boats as fast as you can are you trying to like minimize the number of suppliers and stuff that you have where you're trying to like vertically integrate a whole lot or how are you thinking about that we If you don't vertically integrate for vertical integration sake, there needs to be a business case for it.

23:30Our goal is actually almost the opposite. We don't want to bring things in-house because then we get to tap into a supply chain that already exists. We get to move a lot faster. You can compete those suppliers against each other. There's a lot of value in grabbing something off the shelf. the reason that you vertically integrate is if you need to because the capability is not available off the shelf or you need to because it is such a big cost driver for you that like you need to take those margins and bring them in-house uh or you need to because it's it is necessary in order to get the vertical integration you need to deliver the capability that you want to the market So we vertically integrate the software and firmware because that's tightly coupled with the core of the value we're delivering to the market.

24:23We try not to vertically integrate upholstery because that's not a point. Because you don't want to do that part. So you're basically trying to do as little as possible while ramping the production. Yes. Now, what ends up happening is you start outpacing suppliers and you're like, all right, these people can't keep up with us. We actually have to bring it in-house to be able to do this ourselves. What experiences have you been like with that in particular? I mean, this isn't an exact analogy, but like wire harnessing, for example. We do our own wire harnessing in-house today. That's because it's so process intensive and the turnaround time that you need, like it tends to drive a lot of rate for you.

25:02So you really want to own that in-house. You could do revisions really quickly on them. that's a good example of something that we have in-house we also kind of want to dual source it so we'll we'll outvend wire harnesses as the design stabilizes and we'll continue to do the r &d or early harness builds in in-house um you know at some point some of the like primary structures will need to come back in house or not even primary structures but some of the structural components will need to come back in house how did you think through i think uh you're working on like the third iteration or your like third product right now, how do you think about going into like creating that first version of the boat?

25:46And what was that first version, by the way? When we started ARC, again, we had this very obvious idea. And it was how do you execute on this, which comes down to how do you break the problem down into more manageable steps? The ARC one was that first kind of milestone where we're like, what is a product that we deliver to the market that would be exciting to customers without being overly complex. It's kind of like that Tesla Roadster where you have something that's exciting for the performance, something that's exciting for kind of the technology that exists within it without having all the bells and whistles that you might find on some other boats.

26:26We celebrated the simplicity of that product. And that was a really good first kind of milestone for us we also decided very deliberately to cap the production of that because we knew we were going to make a bunch of mistakes on the way we knew we were going to cause ourselves a lot of pain the windshield for example on the arc one is a massively complex unexpectedly uh not by design a complex piece of the boat and why is that because of the curvature of it and we didn't know what we were doing when we were building the like designing this windshield now we've gotten a lot better at it so you look at the arc one it's probably a thirty thousand dollar windshield you look at the arc sport it's a twelve hundred dollar windshield whoa okay huge difference that comes from hey you know we're learning how to actually go do this that's that's why we start with the arc one so we called it a limited edition luxury cruiser It's a very simple layout, a very simple design.

27:27We then took all those learnings and applied it to the ARC Sport and layered in more complexity now that we have gotten better at building boats. Now that we know more about how to design holes, more about how to design windshields, more about how to design the electrical system, optimize the electrical system. The ARC One is still an awesome product, but the ARC Sport takes it more mainstream. In both of the cases, what we're doing is we're basically starting with these premium, high-margin segments of the consumer space that were right at the cutting edge of where technology was when we started the company.

28:02And we're using those to fund a lot of the R &D. We're using them to bootstrap the scale-up process, bootstrap the start of our production system, the development of that IP, the acquisition of our team, growing our team over time. Like building the muscle memory for actually building things. Exactly. Doing all the building while, again, using the proceeds from selling these high margin, high cost boats to continue to fund that engine and then take that technology that we're developing and just apply it to more and more things. And in our case, it's not, again, about going down market. It's about going across markets and going up the power curve.

28:42So now that we are better at powertrains that are able to provide 500 horsepower to a wake sport boat, we feel comfortable going up to, you know, commercial vessels that demand a thousand to a few thousand horsepower. Do you think that there's like a opportunity? I know that like cruise ships are just a huge thing where they're just they're burning insane amounts of fuel to operate those boats. How big do you think the boats can get in the limit for a powered, you know, an electric boat? This is one of my favorite questions because people are like, ah, you know, cargo ships can never be electric.

29:19The reason that they think of that is because they think in terms of pure battery electric systems. They think batteries aren't capable of... They're like not dense enough? Yeah, not dense enough to get an entire cargo ship across the Atlantic or Pacific Ocean. But that's kind of the wrong mental model. Think about this in terms of hybrid electric systems. Electric propulsion is fundamentally superior for water. It's a simpler technology. It scales linearly with power, whereas diesel engines, combustion engines tend to scale and price exponentially as you go up that power curve, meaning a 500 horsepower diesel engine pretty inexpensive a 5 000 horsepower engine extremely expensive extremely expensive what's like the cost difference for people just i mean by the time you get into the thousands of horsepower you were talking millions of dollars for for kind of these diesel main engines so it i mean it just and it it starts climbing precipitously now again your electric system scales linearly which is you know the difference between one megawatt hour battery versus eight megawatt hours is just kind of an 8x multiple.

30:33Same thing on the electric motor side. So that's already a good starting place. But a lot of these vessels tend to operate at loitering speeds. You take like a tugboat, for example. They run these short, predefined mission profiles. So they're docked. They're just kind of waiting around for a job. They get a call. Cargo ships says we're coming in we need support they go out for a couple hours they pull that tug or cargo ship back in they dock it and then they're done again charge up yeah and then they charge up now all that time that they're at low speeds those diesel engines are running at a very inefficient power diesel engines or combustion engines generally speaking have a very narrow power range that they're efficient at this is why gearboxes exist it's because you're trying to just get this diesel engine to run at a very specific power output electric engines are motors are like you know they're efficient across the stack across the whole stack yeah so when you're going five miles an hour your electric motor is perfectly happy to do that your diesel engine is just literally lighting money on fire not literally but you know actually it kind of is yeah it's it's it's just running super inefficiently and just burning a bunch of fuel exactly yeah Yeah.

31:49And, you know, you have these big tugboats that have hoteling loads. So you're running dishwashers on board, you're running your lights and electricity, your software systems, whatever. That in order to run that, you tend to be running these like large engines to just power your low voltage system. You think of the electric version of this, you could just use your battery packs on board and not have to run these engines. So going hybrid electric makes a ton of sense because now you have the thing that's providing power is a much more efficient system that's more efficient across a broader range of power that is happy to operate at that broad range of power, can support hoteling loads very easily, is better suited to a water environment that's more corrosive because just a simpler system scales linearly with with your power needs all of that makes a lot more sense you then plug it into the hybrid side of this so you get some you know diesel generators like well hey i actually only need 500 horsepower a thousand horsepower diesel generators because my average power consumption when you blend my loitering speeds with my high power speeds is only a thousand horsepower so i could just run those generators at their peak efficiency when i I need them to and be so make it way more efficient even if you only use part like a hybrid model never ever plug it in it is still more efficient wow which is crazy so going back to that cargo ship example well you could go hybrid electric you stop thinking in terms of like how I need to have everything be operated only on batteries think I just need some batteries on board and that'll power it when it's operating at low speeds or whatever and then you pair that with some sort of other form of power generation today that's diesel in the future it might be a small modular reactor like you know there are other things that you could plug in here maybe it's hydrogen maybe it's you know other forms of of like supplying power to that so the electric the electric side would basically eliminate the most inefficient moments for a boat's operation yeah and then and then make it future-proof because now you can plug it into any source of fuel that you want.

34:03And again, those diesel generators can at some point get swapped out for some other more efficient form of fuel generation. The proof point here is that these giant cruise ships, the ones that, you know, everyone goes and parties on, many of those are actually already hybrid electric in the sense that they have electric propulsion and then some sort of power plant on board that just supplies the electric propulsion. Those things are some of the biggest boats in the world. So that has already validated that these systems make sense at even the highest, highest ends like end. Yeah. And the question is just how do you scale the technology to all these in-between levels?

34:42Those are massively expensive systems, which is why cruise ships can afford to do it. Cargo ships, you got to get the price down and you need to, in order to get the price down, you have to scale up from automotive rather than scale down from these insanely expensive cruise ship systems. And that's exactly what we're doing. We're starting with automotive technology and just scaling it up to be able to power the rest of this. So how are you thinking about that? Like on the kind of like critical path to taking over the world sort of situation, how are you thinking about going from just doing a small little boat that costs, you know, a few hundred grand to actually powering one of these massive ships?

35:17Yeah. I mean, it's ambitious. This is, it's the type of ambition that stems from spending years in the industry and learning, just going through all these iteration cycles that we've developed a lot of the core technology. We've developed, more importantly, a lot of the core competency that you need to go after more and more ambitious problems like that. And again, we're using the consumer foothold as a foothold to launch ourselves into the commercial space. Not all of the technology carries over. We can't just say, hey, we're going to string together 20 arcsport battery packs and now we have a commercial product you actually need to switch up some of the architecture to make that viable but we run an 800 volt system on the arcsport we run a thousand volt system on our commercial product those are very similar voltage levels we have a lot of the same experience in terms of dealing with that high of voltage so that that competency carries over the software and firmware competency honestly some of it just maps directly over but it's still regardless that launching off point that the thing that gives us so much confidence to pursue the commercial opportunity and scale the power levels up and up is what we've done on the consumer side on the like iteration side do you i know that you want to kind of have a very clear idea of here's exactly the steps that go into making one of these things but you also want to be constantly like improving the product to make it better uh over you know week over week week over week.