I did not go to CES 2025 with the goal of getting drenched by Lake Mead’s chilly January waters. But when I discovered Los Angeles-based boat startup Arc had brought its new sport boat to Las Vegas, I figured it was worth the risk. It was.
The Arc Sport was a joy to drive, even for a 30-minute outing on a choppy lake. It maneuvered like a heavy jet ski — weight that helped it feel stable. I’ve driven plenty of heavy electric cars, trucks, and SUVs where the weight felt like a drag. In this case, I was happy to have a little heft beneath us.
Like its boats, Arc has moved fast as a startup. Arc, which was founded by former SpaceX engineers, came out of 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 boats in early 2023, raised another $70 million that same year, and set to work on the $258,000 Arc Sport.
In keeping with that pace, Arc delivered its first Sport boat to a customer late last year. That’s a “really fast development time,” founder and CEO Mitch Lee told TechCrunch as we zipped around Lake Mead. And it was only possible because Arc took the time to learn how to make the limited-run One boat before moving on to something with a bit more mass appeal, according to Lee.
“The Arc One for us was that [Tesla] Roadster. First step was, let’s go manufacture this boat. Let’s do it at a small scale, and let’s learn from 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’ve had boats get launched on 95 degree water. Those learnings are incredibly valuable.”
When I arrived, Lee was shivering in the winter breeze next to Lake Mead, but clearly still happy to show off the Arc Sport and what it can do. We climbed aboard and hit the water.
It’s an impressive boat before you even hit the throttle. The fit and finish on the boat I piloted, which was still technically a production-intent vehicle, was striking, especially since CES is not known as a venue for polished prototypes.
There are elements that might make people wonder, though. There was a Tesla-style horizontal touchscreen with smart, fluid software that didn’t scream “legacy manufacturer.” A second screen sat behind the wheel on the helm, showing speed, battery level, and a view from the forward-facing camera.
The Sport is much quieter than a typical gas boat. It’s not silent. I could still hear the motor working underneath our feet; but it was easy to hear Lee, his two co-workers, and another journalist on board. It was no louder than the wind and the sound of the wake being thrown off behind us — a distinguishing feature of Arc’s boats compared to the many other hydrofoil-based electric boat startups.
When you combine that with the other quality-of-life improvements the Sport offers over some other gas competitors – like no fumes, robust software that updates over-the-air, twin thrusters that make it easy to rotate and park the boat, a solid canopy that lowers to guard from the elements, and the lack of winterization required – it makes sense why watersports lovers might pay a premium for this boat.
Boats aren’t necessarily hard to drive. The real learning curve comes from knowing how to navigate and behave on the water. Driving the Sport on an empty Lake Mead, even in choppy waters, was no challenge. Put a hand on the wheel, lift the lock on the throttle knob, and push it forward to have 500 horsepower of fun.
The 226 kWh battery pack kept the boat planted, and also helped the relatively short 23-foot frame make quick pivots as I turned the wheel. These turns were the most fraught part of the experience with the wind and the chop. Sure enough, we got slapped with a wave, spraying us with the icy blue water the Colorado River supplies to Lake Mead.
It was worth it, though. Everyone should be able to have that much fun.
On the way back to the dock, while toweling off, it was hard not to notice Lake Mead’s depletion. A potent combination of seemingly endless drought and human activity has lowered the reservoir to just 27% of its total capacity, according to NASA. In every direction I could see where the water line used to be, a phenomenon colloquially known referred to as the “bathtub ring.”
This has had a direct impact on boaters who use the lake for recreation – exactly the kind of people Lee hopes to sell to. Lake Mead has had to close multiple boat launches and ramps over the last few years, according to the National Park Service, and extend the ones that remain in order to reach the lake’s newer, lower level.
I didn’t ask him if the evaporation of freshwater lakes is a risk for Arc’s addressable market – that’s a grim idea I’ll be sure to raise next time. What I do know is Lee has said his goal is that every watercraft switches to electric. That includes looking beyond powersports, perhaps even to government and defense – an idea that seed investor Andreessen Horowitz is quite fond of these days.
When I asked Lee about this in November, he demurred, 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 the Arc Sport so quickly is because of the work that we did on the Arc One. I could go down this long list of all the carryover and IP, but the same thing applies to going to commercial, going into government sectors, and our aspirations as a business definitely carry over to that. We’re just not quite ready to discuss anything there yet.”
