Dyson Exits Electric Car Project. Is This the Start of the End of the Electric Dream?
Dyson, maker of expensive home appliances and once electric-car-wannabe-maker, announced that they are leaving the electric car race.
Two years ago, Dyson started on its US$2.5 billion electric vehicle project and had since hired 500 engineers and selected Singapore as its manufacturing site. But last week, founder James Dyson announced in a memo to the staff that they were pulling the plug (pun intended) because they could not make the electric car “commercially viable”. And this is coming from a man who found a way to sell US$450 vacuums, US$399 hairdryers and US$300 fans and made them a hit.
This begs the question: if Dyson can’t do it, can anyone?
Take Tesla, arguably the poster boy for electric cars. In the second quarter of 2019, it manufactured and delivered more cars than it ever did in any quarter of its existence, and still reported losses amounting to US$408 million. And this is with the Model 3 included in its line-up, the model that was supposed to be the messiah to lift the company out from the red. So, if Dyson and Tesla can’t do it, who can?
In China, where the electric dream is strong, the country’s leading electric car maker, Nio, reported a greater-than-expected loss last month, which sent its stocks tumbling by 70%. In the short five years of its existence, Nio lost over US$5 billion, which took Tesla three times as long to magic away. So, if Dyson and Tesla and China can’t do it, is there anyone else?
Even established conventional carmakers who have or plan to add an electric model/range to their offerings would struggle to make it profitable. Collectively, they have earmarked around US$225 billion to develop EVs, but it would be a while before they can recoup costs—despite improved sales rate, electric cars still only make up about 2% of global auto sales. And with high prices and limited infrastructure, who really knows when this number will increase to one of significance.
While it seems like electric dreams are one-by-one being extinguished, not all is lost over at Dyson. The company will continue to focus on technologies that are paving the way into the future, particularly battery development as well as AI and robotics. Maybe a self-learning, portable and, of course, expensive but must-have Dyson breadmaker will be in the making.