Turns out it’s harder to make an electric car than a vacuum.
Dyson, the British maker of highly designed consumer products, acknowledged as much Thursday, when it said will shutter its four-year-old automotive business.
In a letter to employees, chief executive James Dyson wrote the company “simply can no longer see a way to make [the vehicle project] commercially viable,” though he said the 523-person global automotive team had “developed a fantastic car.” The company says most of those workers will be “absorbed” into its home division, which builds products like vacuum cleaners and hairdryers.
The company says, well, the world has changed since the project got began in 2015, and even since Dyson announced it to the world in 2017, along with plans to invest $2.5 billion on research and development. (The company declines to say how much it spent.) Since then, bigger and more established automakers like Volkswagen, Daimler, General Motors, and Honda have put forward ambitious plans to spend a collective $300 billion on electric vehicle technology over the next five to 10 years. The first fruits of those investments are already available: luxury vehicles like the Jaguar I-Pace, the Audi E-tron, and the Mercedes-Benz EQC, and others built to appeal to the mass market, like the Chevrolet Bolt, the Hyundai Kona Electric, and the Nissan Leaf. Those larger and more established competitors have simply squeezed upstart Dyson out of the race.
Even the most established—and buzziest—automakers have had trouble making money from electric vehicles, at least so far. Research by the consultancy AlixPartners suggests automakers’ heavy investments in electrification could lead to a $60 billion drop in pre-tax profits through 2023. Automotive profit margins are already thin, with a successful rollout seeing profit margins just above 10 percent. Models with tons of research and development behind them should take longer to recoup their costs. As Tesla CEO Elon Musk has noted, the car-making business isn’t for the faint of heart. The electric car-making business is even less so.
Dyson had originally promised to roll out its electric vehicle in 2020, though it delayed the date by a year when it announced it would open a manufacturing plant in Singapore. As recently last spring, Dyson filed patents to protect its electric vehicle designs.
Still, the Singapore project will move forward, according to the Singapore-based Straits Times, and a spokesperson for Dyson emphasized that the company’s work on electric vehicles wouldn’t go to waste. The automotive group’s research on solid state batteries, in particular, will help the company’s other products, the spokesperson said. Solid state batteries could one day allow all sorts of products—cars and vacuums included—to go farther without a charge compared with their lithium-ion cousins; for now, though, the solid-state batteries are much more expensive to make.