The suddenness with which Dyson has scrapped its electric car project will be as much of a jolt to the car industry as when the firm launched the project in the first place.
Company founder James Dyson had bold plans and a firm belief his company was developing ground-breaking technology that would set his car aside from the growing ranks of EV rivals. Given that, it’s genuinely startling that he has shuttered the project so quickly.
But the decision also shows James Dyson’s business acumen. In his email to staff, he is adamant about the potential of the technology his company has developed for the car – particularly in terms of batteries – but it was the business case that just didn’t stack up. He simply couldn’t find a way to make the project financially viable.
In a way, it’s odd that realisation seemed to be a surprise to Dyson: just look at the challenges and travails of numerous EV start-ups. The obvious comparison is with Tesla, an EV firm founded by a well-funded car industry outsider with bold plans to utilise new techniques and technology to take on the car industry giants. Tesla has now proven itself a credible contender in the industry, but it is still struggling to turn sales, reputation and its huge brand strength into profits.
Dyson would have faced similar challenges. The firm might have a proven reputation for producing vacuum cleaners and home products, but the sheer complexity of an electric car is on a different scale.
Then consider the race among car firms to develop their own electric cars, moving into the market with manufacturing expertise and abilities to achieve economies of scale even a well-funded start-up like Dyson would struggle to match. Volkswagen, for example, is talking about producing 150,000 of its electric ID models next year. It leaves a firm like Dyson with little margin for error.
Arguably, those challenges haven’t really changed since Dyson launched the car project, raising questions as to why it didn’t react to them earlier. But credit Dyson with accepting failure now, before it began the huge capital investment of tooling up its factory in Singapore.