Can Dyson's Electric Car Vision Become A Reality?

The decision by Sir James Dyson to invest £2.5 billion in the development of a 'radically different' electric car has been scoffed at by some industry experts, but could his vision become a reality?

The decision by Sir James Dyson to invest £2.5 billion in the development of a 'radically different' electric car has been scoffed at by some industry experts, but could his vision become a reality?

Dyson isn't the first entrepreneur to take up the challenge to mass produce electric cars, Elon Musk the founder of Tesla is already producing high-end electric vehicles and other technology-led companies including Google and Apple are also developing electric car technology. Recent moves by the UK and German Governments to set out plans to ban the manufacture of petrol and diesel-engine vehicles by 2040 are adding impetus to the global R&D effort.

For most legacy vehicle manufacturers, Dyson's decision to make a late entry to the electric car market is unsettling. Whilst their all-electric programmes are already well underway, Dyson has a track record for using clever design ideas to disrupt markets in a way that consumers find appealing. Importantly, he is also a trusted figure in an industry which has recently faced criticism for hiding the truth. Legacy manufacturers on the other hand, have existing market segments to protect.

So, can Dyson do it?

The problem is that no one really knows the extent of Dyson's capabilities. We know he can make electric motors and inverters; the technologies needed to operate electric drivetrains and manage heating and cooling systems. The unknown factor is his ability to manufacture batteries with a longer mileage range than the standard lithium-ion batteries used in existing models. His decision to invest $15 million in Sakti3, a US-based start-up specialising in the research and development of solid-state batteries in 2015, suggests he may well have a solution in mind.

The main barrier to market entry for Dyson's new electric car is the ability to scale up production to meet rapidly-growing consumer demand. Tesla has committed to manufacturing 1 million all-electric cars by 2020 but seems to be struggling to manufacture the Model 3 in the volumes promised. This is nothing compared to required volumes in China where 28 million vehicles were produced last year - a figure which is expected to grow to 40 million by 2025. To stand a chance of securing a share of this market, at the point of market entry, Dyson will need to be manufacturing around 300,000 cars a year to achieve the economies of scale necessary to ensure mass-market appeal.

There is also strong competition. The Volvo/Geely Car Group's electric brand, Polestar, has recently announced plans to release its first all-electric car, Polestar 1, in mid-2019. The car is based on Volvo's Scalable Platform Architecture (SAP) for efficiency and ease of production. As a legacy manufacturer, Volvo already has the reach in terms of aftermarket support too.

If Dyson is going to make a success of his late challenge, he will need more than clever ideas and production know-how, he will need quick access to the burgeoning Chinese marketplace and its ready-made supply chain. Fortunate then that he already has a foothold in Asia with a manufacturing plant in Malaysia and sourcing agreements for much of the required technology are already in place.

Can Dyson do it? Yes, he probably can.

Richard Gane is a director and automotive sector specialist at supply chain firm, Vendigital

www.vendigital.com

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