I didn’t go to CES 2025 with the intention of drowning in the frigid January waters of Lake Mead. But when I discovered that Los Angeles-based boat startup Arc had brought its new sports boat to Las Vegas, I knew it was worth the risk. it was.
The Arc Sport was a joy to drive, even for a 30-minute jaunt on a muddy lake. It maneuvered like a heavy jet ski – weight that helped it feel stable. I’ve driven many heavy electric cars, trucks and SUVs where the weight felt like drag. In this case, I was glad to have some weight under us.
Like its ships, Arc has moved quickly as a startup. Arc, which was founded by former SpaceX engineers, emerged from stealth in 2021 with backing from Andreessen Horowitz and Chris Sacca’s Lowercarbon Capital. It raised a $30 million Series A a few months later, led by Eclipse Ventures partner and former Tesla executive Greg Reichow. The startup shipped its first $300,000 Arc One ships in early 2023, raised another $70 million that same year, and began work on the $258,000 Arc Sport.
In keeping with that pace, Arc delivered the first Sport Boat to a customer late last year. That’s a “very fast development time,” founder and CEO Mitch Lee told TechCrunch as we rolled around Lake Mead. And that was only possible because Arc took time to learn how to make a limited-steer boat before moving on to something with a bit more mass tow, according to Lee.
“Arc One for us was that (Tesla) Roadster. The first step was, let’s go make this boat. Let’s do it on a small scale and learn what it’s like to have these boats in the field with customers,” he told TechCrunch in an interview in November. “We’ve had boats go through hurricanes now. We have had boats launched in 95 degree water. These lessons are incredibly valuable.”
When I arrived, Lee was shivering in the winter breeze near Lake Mead, but obviously still happy to show off the Arc Sport and what it can do. We got on board and hit the water.
It’s an impressive boat before you hit the throttle. The fit and finish on the boat I piloted, which was still technically a production-purpose vehicle, was stunning, especially since CES isn’t known as a place for polished prototypes.
However, there are elements that can make people wonder. It had a Tesla-style horizontal touchscreen with smart, fluid software that didn’t scream “legacy manufacturer.” A second screen sat behind the steering wheel, showing speed, battery level and a view from the forward-facing camera.
The Sport is much quieter than a typical gas boat. It is not silent. I could still hear the engine working under our feet; but it was easy to hear Lee, his two associates and another journalist on board. It was no stronger than the wind and the sound of the wake being thrown behind us – a distinguishing feature of Arc’s boats compared to many other hydrofoil-based electric boat companies.
When you combine that with the other quality-of-life improvements the Sport offers over some other gas competitors – like smokeless, powerful software that updates over the air, dual thrusters that make turning and parking the boat easy, canopy tough that sits to protect from the elements and the lack of winterization required – it makes sense why water sports enthusiasts might pay a premium for this boat.
Boats are not necessarily difficult to steer. The real learning curve comes from knowing how to navigate and behave in the water. Driving the Sport on an empty Lake Mead, even in choppy waters, was no challenge. Put one hand on the wheel, lift the lock on the throttle and push forward for 500 horsepower of fun.
The 226 kWh battery pack kept the boat steady and also helped the relatively short 23-foot frame make quick turns as I turned the helm. These turns were the busiest part of the wind and chop experience. Sure enough, we were hit with a wave, splashing us with the icy blue water that the Colorado River feeds into Lake Mead.
It was worth it though. Everyone should be able to have so much fun.
On the way back to the dock, as I was toweling off, it was hard not to notice the depletion of Lake Mead. A powerful combination of seemingly never-ending drought and human activity has reduced the reservoir to just 27% of its total capacity, according to NASA. In every direction I could see where the water line was, a phenomenon colloquially known as the “tub ring.”
That has had a direct impact on boaters who use the lake for recreation — exactly the kind of people Lee hopes to sell to. According to the National Park Service, Lake Mead has had to close many boat launches and ramps in recent years, and extend the ones that remain in order to reach the newer, lower lake level.
I didn’t ask if the evaporation of freshwater lakes is a risk to the Arc’s addressable market – that’s a grim idea I’ll be sure to bring up next time. What I do know is that Lee has said that his goal is for every watercraft to go electric. That includes looking beyond power sports, perhaps even to government and defense — an idea that startup investor Andreessen Horowitz is very fond of these days.
When I asked Lee about it in November, he was dismissive but left the door open.
“We can’t afford to get distracted too early, because if we do, we will fail as a company,” he said. “The reason we were able to develop Arc Sport so quickly is because of the work we did on Arc One. I could go down this long list of all transfers and IPs, but the same goes for going commercial, going into government sectors, and our aspirations as a business definitely cross over into that. We are not ready to discuss anything there yet.”
