Vacuum Cleaner Technology Giant Dyson to Make £2 Billion Bet on Electric Cars

Dyson is widely considered to be one of the UK’s most successful technology companies. The Wiltshire company is best known for developing the latest technology in the world of home appliances – particularly its signature range of vacuum cleaners. However, in a bold move, Dyson is now embarking on a hugely ambitious £2 billion investment project to develop electric cars.

There is no doubt that Dyson has demonstrated its engineering prowess and technological ingenuity time and again in the household appliances industry in which it has made its name. As well as its cutting edge, top of the range vacuum cleaners, Dyson also makes hairdryers, hand dryers and bladeless fans: also all premium products in their respective markets. But electric cars is a huge leap and one that seems destined to either propel the still privately owned company into a whole new stratosphere or turn out to be a potentially fatally ill-judged drain on its resources.

However, the planned new business division might not be quite the level of tangent from Dyson’s core competencies that it would at first glance appear to be. The success of electric cars is implicitly linked to their battery technology and Dyson has long been deeply immersed in the development of the latest battery technology. However, it is rumoured that the company may not include its world leading ‘solid state’ battery technology in its first planned electric car model. Lithium ion batteries are thought to be the likely alternative.

Dyson has also invested heavily in the development of durable, lightweight materials technology, something that has been a major component in the success of its core business. There is speculation that Dyson will develop its car models to be built mainly from plastics, something that would make the vehicles very light, as well as allow for greater innovation in their design.

Dyson’s solid state batteries, a technology it has been developing for years, are technologically superior to lithium ion, lasting for longer and charging more quickly. The fact that the first of the three car models planned for now will not use this battery technology suggests that ambitions for it are scaled down. It would appear the first model will be, while of course planned to be a qualified success, more about learning how to build a car and developing a supply chain and route to market. The manufacturing run is expected to reach only 4 figures in terms of units produced.

Scaling back the technology ambitions of the first model will also allow Dyson to hit its preliminary target of bringing it to market by 2021. Philippe Houchois, an automotive analyst at Jefferies investment bank, believes this is part of the company’s wider strategy as it attempts to successfully crack the new market:

“They want to control the variables. What they don’t want to be is a Tesla that over-promises and then delivers two to three years late”.

However, as well as its expertise in lightweight materials technology, being a battery technology leader is still clearly where Dyson sees its competitive advantage and what will ultimately make or break the success of the new division. Of the £2 billion investment planned, £1 billion is being dedicated to battery development.

Manufacturing is expected to take place in either Singapore or Malaysia, where Dyson currently does most of its production. There are questions over whether Dyson can succeed in having its supply chain in place on time to meet stated targets but their current business does mean they have far more experience in this area than other new entrants to the automotive market, such as Tesla. One concern is that Dyson’s existing business has been very inhouse focused, which is less typical for their new market. One individual who has already advised Dyson was reported in the Financial Times as commenting:

“They have tended to keep all the of the right people in house. But that approach doesn’t work in autos, where more of the work is outsourced.”

But long term Dyson suppliers believe underestimating the company would be unwise. One, commenting on Dyson founder Sir James Dyson’s competencies is said to have remarked:

“He’s not a Silicon Valley start-up, he understands manufacturing. I get the feeling that he’s much more advanced than we’re led to believe. He’s either completely misaligned himself, or he’s better organised than anyone in the market expects.”

Ten years from now it’s not impossible that Dyson could be one of the major players in car manufacturing and no longer synonymous with hand dryers and vacuum cleaners.

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