Dyson’s Electric Car Plans Prompt Questions.
“The timing is tight, the technology is unproven, the competition is laps ahead and the future funding is uncertain. Sir James Dyson’s autobiography is entitled Against the Odds but his bet-the-company plan to move into electric cars is taking things to extremes”
British vacuum cleaner maker Dyson unveiled big plans Tuesday to move into the electric car market, but so do lots of no-hopers. What chance does it have of succeeding against other upstart newcomers, not to mention the hugely powerful traditional manufacturers which have already committed billions of dollars of investment and developed an impressive range of upcoming electric cars?
After all, Dyson hasn’t given any details of what it might make and how many or where, aside from vague references to it being expensive, and that it won’t be mistaken for already planned electric cars.
The key differentiator might be the battery technology, expected to be related to University of Michigan spinoff Sakti3’s solid state technology which is potentially smaller, safer, more reliable and longer-lasting than current technology, and said to be the most advanced lithium-ion batteries on the market.
Dyson had been rumored to be about to plunge into this market, but initial reaction was hampered by the lack of detail.
The Financial Times Lex column was cautious.
“The timing is tight, the technology is unproven, the competition is laps ahead and the future funding is uncertain. Sir James Dyson’s autobiography is entitled Against the Odds but his bet-the-company plan to move into electric cars is taking things to extremes,” Lex said.
“Inevitably, this gambit recalls Tesla – although it is first worth remembering that plenty of other electric carmakers have failed outright over the past 120 years and even Tesla’s success is not assured. If Sir James opts for Chinese factories for the bulk of his production, he can be closer to the biggest potential market – and minimise exposure to any mess from the Brexit he championed,” Lex said.
Dyson has been a vocal champion of the economic benefits of Britain leaving the European Union (Brexit). The FT editorial line has been solidly in the opposite corner.
Lex pointed to the advantages of solid state batteries.
“Solid-state batteries fuel optimism. The technology, which offers numerous benefits including faster charging, has not yet been commercialized in cars but Dyson reckons it is ahead of the pack. Doubters point to earlier problems at Sakti3, the battery company which Dyson bought for $90m two years ago,” Lex said.
Investment researcher Jefferies, in a report headed “A new OEM (manufacturer) is born?” said Dyson’s decision was a strong reminder that it was easier to get into the automotive business, but more difficult to get out.
And Jefferies pointed out that Dyson bought Sakti3 because it was developing batteries that could reach density “in excess of 1,100wh/litre vs 400 currently and circa 700 expected by 2020 with existing lithium-ion chemistry.”
Investment researcher Evercore ISI also wondered about details of the project, like volume targets, battery technology and prices.
“While it is certainly too early to say whether Dyson can make a successful entry into the EV (electric vehicle) market, we acknowledge that it is a company with a track record for strong products and genuine engineering innovation,” Evercore ISI analyst Arndt Ellinghorst said.