End of the road: Dyson crashes out of race to make electric cars

Founder of the Dyson company James Dyson said his team had developed a ‘fantastic car, but we simply cannot make it commercially viable.’ (AFP)
Updated 12 October 2019

End of the road: Dyson crashes out of race to make electric cars

  • Inventor vows to press on with $3 billion new tech investment despite abrupt U-turn
  • The plan ran into controversy when the company revealed that its first car plant would be in Singapore

SINGAPORE: British inventor James Dyson has dropped out of the race to produce electric cars in the face of stiff competition and after criticism of the Brexit-backing billionaire’s decision to build the vehicle in Singapore.

Dyson, known for his bagless vacuum cleaners and bladeless fans, announced two years ago that he was investing £2 billion ($2.5 billion) in developing an electric car, and the first vehicles were expected in 2021.

The ambitious project catapulted the 72-year-old entrepreneur into competition against established players such as US firm Tesla and car makers from the US to China.

Adding to his difficulties, the plan ran into controversy when the company revealed that its first car plant would be in Singapore and its global headquarters were shifting to the affluent city-state.

Dyson insisted it was to be closer to booming Asian markets — but there was fury that the tycoon was not investing more in UK manufacturing after vocally supporting Britain’s exit from the EU.

There had, however, been little indication that Dyson was having second thoughts about the high-profile project, which hundreds of employees were already working on, until an announcement late Thursday of the abrupt U-turn.

Dyson said that his team had developed a “fantastic car” based on an “ingenious” approach, but added: “Though we have tried very hard throughout the development process, we simply cannot make it commercially viable.”

“We have been through a serious process to find a buyer for the project which has, unfortunately, been unsuccessful so far,” he said.

There are 523 people in the automotive team, most in Britain, and 22 in Singapore, a spokesman said. Dyson said “as many of the team as possible” would be reassigned to other roles in the company.

Singapore government agency the Economic Development Board predicted the decision to ditch the project would have a minimal disruption on Dyson’s operations in the Asian trading hub.

In May, Dyson unveiled brief details of patents filed for the electric car and said it would be more energy-efficient than rivals — and with “very large wheels” for city and rough-terrain driving.

But analysts were skeptical about the plan and not surprised about the change of heart.

“From the first instance it was always difficult to understand why Dyson thought that it would have any sort of competitive advantage in actually embarking on this project,” Walter Theseira, a transport economist at Singapore University of Social Sciences, said.

“Selling a successful electric car is a high-capital enterprise, it’s a very ambitious project.

“Given the global competitive landscape, you’re adding a new manufacturer which is untested in the car industry and which does not appear to have the same kind of deep pockets as existing local car manufacturers,” he said.

Electric vehicles are increasing in popularity as governments worldwide seek to phase out polluting petrol and diesel cars, but producing them profitably is a major challenge for even leading manufacturers.

While Tesla has strong consumer appeal, investors have been frustrated by the pace of production and the company’s ability to hit its financial targets.

Despite dumping the project, Dyson insisted the company would continue a $3.1 billion investment program in new technology, including the manufacture of batteries, robotics, machine learning and AI.

The company in May completed the move of its headquarters to Singapore, where many international firms have their Asian bases, and Dyson has since made headlines by going on a property-buying spree.


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 46 min 21 sec ago

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.