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Author Topic: Sir James Dyson: “I blew half a billion quid... on an electric car”  (Read 1394 times)

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Sir James Dyson: “I blew half a billion quid... on an electric car”. Britain’s richest man’s failed £500m gamble on building a rival to Tesla

The inventor spent a small fortune developing his idea. Then he scrapped it before the first prototype took to the road. He tells John Arlidge why

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Unplugged: Dyson with his electric car at the firm’s research centre in Wiltshire

“This is the first one that ran. I drove it secretly in a screened-off compound we have here,” says Sir James Dyson. It is 11am on an early spring day at Dyson’s new research centre in Wiltshire and Britain’s best-known innovator — and now Britain’s richest person — is showing off his most keenly anticipated invention. Keenly anticipated, that is, until he scrapped it. He calls it N526, but to you and me it’s the Dyson car.

It’s the first time he has shown the seven-seater, electric SUV with a 600-mile range to anyone outside his firm — the picture, above, is the first to be published. It is also the first time he has confessed how devastated he is that it won’t take to the road. “There’s huge sadness and disappointment. Ours is a life of risk and of failure,” he says. “We try things and they fail. Life isn’t easy.”

His pain was initially eased by his decision to retool the former RAF base at Hullavington, which he had spent £250m renovating to become the development and test site for the car, to develop instead a new kind of ventilator to help the NHS cope with the coronavirus pandemic. In the end it was not needed because additional ventilators were sourced elsewhere. Dyson, who spent £20m on the project and has not accepted any government aid to support his business, hopes the ventilator will be used in other countries.

Dyson has had setbacks before en route to the top of the Rich List. He scrapped his washing machine five years after it went on sale because it cost too much to manufacture, but the car is a failure of epic proportions. Not only has he axed it before going into production, it has cost him £500m of his own money. Dyson is a private company. It is a salutary reminder that in a world where billionaires tend to get richer in their sleep, they can still screw up royally.

It’s a shame because the car is — was — special, all right, largely because of Dyson’s battery engineers, who have spent decades developing high-power, quiet, quick-charging cells for everything from cordless vacuums to hair straighteners. “This is the lithium ion pack that would have delivered 600 miles on a single charge,” Dyson says, proudly running his fingers over its 8,500 copper cylinders. Even on a freezing February night, on the naughty side of 70mph on the motorway, with the heater on and the radio at full blast? “Yes, yes.”

That range was not achieved by making a light, small car. The Dyson is huge — five metres long, two metres wide and 1.7 metres tall. It weighs 2.6 tons, even though the body is made of aluminium. But it still looks sporty. “The windscreen rakes back more steeply than on a Ferrari,” Dyson says smiling. The wheels are bigger than on any production car on the market — almost one metre in diameter if you include the quiet-running tyres that “give low rolling resistance for economy yet excellent ride”. (He’s such a product geek, he actually talks like this).

Inside there is room for seven adults in three rows. Round headrests give each of the seats, which are thin and firmly upholstered, the look of a lollipop. “I hate those armchair-style seats that you sink into, because there’s never enough lumbar support and you get back pain,” Dyson frowns. There are also the usual Dyson design quirks. The storage bins look like pull-out filing cabinets and all the key dashboard information — speed, sat-nav instructions — floats in front of your face like a hologram “so you never have to take your eyes off the road”.

I want one — so why can’t I, he, or anyone else have one? Money killed the car. “Electric cars are very expensive to make. The battery, battery management, electronics and cooling are much more expensive than an internal combustion engine,” he explains. It turned out that each Dyson would have had to fetch £150,000 to break even, far more than electric models from the big car makers, which subsidise costs with sales of traditional petrol and diesel cars.

BMW, Mercedes, Audi and Jaguar Land Rover “are making huge losses on every electric car they sell”, he explains. “They’re doing it because it lowers their average CO2 and NO2 emissions overall, helping them to comply with EU legislation. I don’t have a fleet. I’ve got to make a profit on each car or I'd jeopardise the whole company. In the end it was too risky."

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Electric dreams: the seven-seat car may have a futuristic interior but it will be consigned to history

From the day the car was announced, some critics insisted it was “a vanity project” doomed to failure. They point out that Tesla — hailed as a success by many — has burnt through $19bn of investor cash, but is still not profitable. “It was never a goer, given the massive capital requirements,” argued David Bailey, professor of business economics at Birmingham Business School at Birmingham University. “It was not a vanity project at all,” Dyson retorts. “When we started in 2014 we had good technology and a very efficient car with a long range. It was viable. But when, later, other companies started producing electric cars at a loss, it became too risky for us.”

All is not lost. Many of the 500 people working on the car have stayed on to drive research into batteries, robotics, air treatment and lighting. “The car people are a talent influx,” says Dyson. He is still investing the £2.5bn earmarked for the car across his business in Britain and overseas, including opening a new research base in Singapore.

Ah, Singapore. That’s the other issue that has caused Dyson — a determined EU leaver — pain recently. When he announced 15 months ago that he was moving his firm’s head office there, it sparked accusations that he was a tax-dodging Brexiteer abandoning Britain when the going got tough. He bristles at the suggestion. “We didn’t move to Singapore. That expression is wrong. There are only three or four key people there — CEO, finance, legal. We’ve grown our head count in Britain since the announcement and now have 5,000 people here developing products for Europe and North America.”

So why do it? It was bound to generate bad press. “Asia is the fastest-growing market in the world and already accounts for 50% of our sales. Asians love new technology, that latest thing, and absolutely ‘get’ design. If you are designing things for people in Asia, you should be in Asia. You’ve got to live it and breathe it, to think like Asians. It would be arrogant to think that we can imagine products for that market sitting here in Wiltshire. We needed to be headquartered in Asia.”

Besides, investing in Asia is what British firms should be doing post-Brexit, he goes on. “Let’s embrace the world, not just look to Europe. And let’s welcome talent from all over the world, not just from Europe.” All Dyson products are manufactured in Asia — in Malaysia, Singapore and the Philippines, and Dyson spends one-third of his time there. But he must be paying less tax now that the head office is in Asia? “No, no. Slightly more, in fact, because Singapore has fewer bilateral trade treaties, so we get tax withheld, which is not recoverable. We actually expect to pay more tax as a group. We paid more tax in the UK in 2019 than in 2018.” Dyson ranked fourth in this year’s Sunday Times Tax List, paying £103m in 2018.

Did the very personal criticism — he was accused of “staggering hypocrisy” — hurt? “A little bit. But life is like that. You can keep quiet and say nothing, then maybe you won’t get criticised in the press. But I can’t quite do that because I believe in free trade.”

The row has not dimmed his optimism about Brexit. He is convinced Britain will reach a good trade deal with Brussels. “At the 11th hour, the EU will agree to a deal without all the contingent demands they’re making now. But we have to be robust — it’s a commercial negotiation. We have to stick to our guns. It all depends on them.” Dyson reckons that countries that “have the same belief in free trade”, such as America, Australia and Singapore, will also be very quick to do deals.

When Dyson and I last met just after the Brexit referendum, a few miles down the road at his main UK plant in Malmesbury, he described his post-Brexit vision of Britain as a high-skill, low-tax Singapore-style state lying off the European continent. Nothing that has happened since has changed his mind. “As a nation we don’t value engineering and science, or businesses that try to exploit those things. We can learn from Singapore. Let’s embrace education, engineering, commerce, free up planning permission and make things again.”

In fact, he now thinks Britain should go further than Singapore and move to an even lower tax business model than the Tiger economy. Once the borrowing incurred to fund the government’s emergency support package for the economy post-Covid-19 has been paid down, “it would be a good opportunity to look at reforming the tax system. I would scrap corporation tax. Corporation tax is a funny tax because it’s a tax on profits and companies need to make profits to invest. Those companies that borrow significant amounts and offset interest payments against tax — particularly private equity — pay less tax, whereas those that do not operate in debt pay more tax, so find it harder to invest for the future. It’s perverse and distorting. Businesses already pay significant tax through VAT on sales, national insurance, business rates and, in our case, World Trade Organisation import duty as well.” How would the government make up the lost revenue? Corporation tax receipts were £56bn in 2016-17. “Businesses would invest more and create more wealth and employ more people who would pay more tax and VAT.”

It’s not only the EU that has caused headaches for Dyson. Many voters in Britain and America —especially young voters — have recently embraced left-wing policy platforms put forward by the likes of Jeremy Corbyn and Bernie Sanders. Both have declared that “every billionaire is a policy failure”. How does it feel to be branded a human “mistake”?

“That’s the privilege of being young, isn’t it? But it is also troubling because they’re not seeing the value of wealth creation,” he says. “You need entrepreneurs — people who make technological progress, drive things forward, create wealth for the country and employ lots of people. We’re not using government money here in Wiltshire. It’s not a government directive that we produce hand dryers, hairdryers, vacuum cleaners or air filters that use a 10th of the energy of most others and are, therefore, cheaper to run and better for the planet. We’re doing it because we believe it’s the right thing to do, because we don’t mind taking risks, don’t mind losing our money — risking our whole lives and wealth on enterprise.” Gesturing around the vast hangars of Hullavington, which opened in 1937 and served as a training base for fighter and bomber pilots before being decommissioned and falling into disrepair, he says: “We’ve restored life to this place. These are the things that wealth creators can do.”

Will young voters change their views? “Maybe as they get a bit older. They have not understood how businesses are created, how old businesses die and new ones spring up, why exporting is important. Globalisation is not a dirty word. Developing technology is so expensive, you have to be able to sell all over the world.”


Despite scrapping the car, Dyson still thinks he can succeed in the car market by making the solid-state batteries that will power (small sigh) other manufacturers’ models. Solid-state cells are the key to the success of electric cars because they are more energy efficient than lithium ion ones and also much smaller and lighter. They generate a lot less heat, so don’t require complex and costly cooling systems, nor do they have a nasty habit of exploding. They’re easier to recycle too.

As he walks past the robotic white gantries that would have served as the first production line for his car, Dyson says: “Other people are developing solid-state batteries. We may be the first. If what we’re doing turns out to be suitable for other people, then that’s an option.” The government wants to ban sales of all fossil-fuel cars by 2035. Can this be done? “Yeah, it’s absolutely doable. In fact, 2030 is doable. I hate diesel.”

It’s time to put the black dust sheets back on the Dyson, but before we head back out into the West Country sunshine, I ask if he might ever have another go at a car. “I wouldn’t say no, but the commercial circumstances would have to be right,” he says without hesitation. “The garage door never closes,” he says, closing the garage door.

THE DYSOMETER
  • Powertrain Two 200kW electric motors
  • Power 536bhp
  • Torque 480 lb ft
  • Acceleration 0-62mph: 4.8sec
  • Top speed 125mph
  • Range / CO2 600 miles / 0g/km
  • Weight 2,600kg
  • Price £500m
  • Release date Never
  • Rating ★★★★★

Source: The Sunday Times


Online ryevac

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By 2035 i wont need a car hopefully, and certainly could not afford an electric car ? - now or then.

I think it would have been a better idea to target joe bloggs, with the likes of the "peoples electric car", mass production of  a general purpose shorter range car.

Powertrain Two 200kW electric motors
Power 536bhp
Torque 480 lb ft
Acceleration 0-62mph: 4.8sec
Top speed 125mph
Range / CO2 600 miles / 0g/km
Weight 2,600kg

Who needs those specs ?
 
One thing i have learn't over the years in business is supply what the customer needs - do not have a pipe dream and try to upsell that as it will not work.

Good read.
The only way to fail is not to try.

Online MVacs

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I thought it was a very interesting and candid interview from James Dyson. It addressed the move to Singapore that nobody really knew the nuts and bolts of too.

This quote resonated with me:

Quote from: James Dyson
As a nation we don’t value engineering and science, or businesses that try to exploit those things. We can learn from Singapore. Let’s embrace education, engineering, commerce, free up planning permission and make things again.

When I first wanted to manufacture an original MV product, I tried to do it here in the UK. I wanted to be able to use the "Made in England" tag. Sadly, it was an absolutely hopeless endeavour. The firms I encountered here were arrogant, obstructive and stuck in old ways of doing business. Not to mention eye-wateringly expensive.

When we moved to our our current premises, we had a running battle with the rates, the local council (Stockport MBC), planning and the valuation office and they absolutely stiffed us on business rates to the tune of tens of thousands. Only recently did Hammond cut it some and then Boris saved us thousands by cancelling our Business Rates bill altogether.  :thumbsup:

We innovate and bring new products to market *despite* various government policies, not usually *because* of them.

I've not yet been to Singapore, but we do business with companies in China, Taiwan and Hong Kong and I travel there twice a year. James Dyson is right: you need to be there. When you're there you can get how they think. These countries want to do business. Sadly, it's a challenge to find a UK manufacturer of anything anymore.


Online ryevac

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I understand that, the uk is a hoop jumping fraternity.
I looked for support for a business 12 years ago, had a good plan, it had great potential and was part of an industry that no one covered.
I was knocked over by the lack of availability of affordable start up units in my area.
When confronting the areas council, after a couple of meetings i realised that the business supporting grants were absorbed by administration, staffing, premises (3 business centres) and it seemed any support was for more established business's to further develop, thus creating employment etc.
I was offered £500 - if i invested £500 of my own ! i didn't really need any direct finance tbh - i needed an affordable long term workshop but all they seemed to offer was office suites etc.

Over the last year, whilst working for someone on the books (on 2.4ghz) electronics - laid off feb 2020. i had an idea to develop a prototype product of my own. I have a prototype - it works - and as an addition to a certain type of equipment it makes life easier - and the annoying dangerous control cables can be done away with.

I have a pastime, and part of that involves maintenance of the equipment i use. There are many commercial companies as well as hobbyists that do this work and it isn't cheap. almost all use this machine or a derivative of it. There are several companies that make and sell the machine but all are tethered with control cables - my idea gets rid of that.

I searched high and low for this add on product for my own machine (there are many people who have this machine too) globally, but i couldn't find the product - until i stumbled upon the patents website, discovering a japanese guy has already thought of it and it is produced with a piece of higher end japanese equipment - same wireless principle but i developed an almost same product but for a different piece of equipment.

It is designed on simple AVR microprocessor using C++ programming language which i have had to learn over the last 12 months.
With the software i have had to integrate a failsafe and it work well, very well.


Dont know where to go from here now - if i was to market it - produce and sell it would i fall into legal problems ?

The product would sell, i can produce it with a good profit margin (all parts from china) aren't they all ! and it could be used with other products. I could adapt this product for disabled use too. 
How do i get on with electrical safety certification ? i Know my product is safe and seeing some chinese electrical gear i do wonder how they get away with it ?

Thought about approaching chinese manufacturers myself, get them to produce it and i would market and sell.
Quality, safety, legal issues to consider and no doubt would be quickly cloned by others.

How does it work when a chinese manufacturer clones a product and sells - patents / copyright ???

Opened a right can of worms, in the meantime i now continue to build power cabinets for the mobile phone industry   ;D

The only way to fail is not to try.


Online MVacs

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How does it work when a chinese manufacturer clones a product and sells - patents / copyright ???

You’ve asked a lot of interesting questions, some of which I can answer over a day or two as time allows.

In the one quoted above, they could and maybe will copy anything of yours and you will have no legal recourse is the short answer.

The way it works in China is that you build relationships with people over time. They won’t lose face by bootlegging your stuff if you have face and a good relationship with them.

So if you go out there, eat and drink with them, and build a relationship, you will build friends for life.

If you find random people on Alibaba or a similar platform to do some business with, you may have a different experience.

Business in China works on friendship and trust, and then face and history. Legal stuff matters less. If you’re Dyson or Samsung, you might get something solved in a court. For everybody else, disputes are solved with conversation and the teapot. Or maybe a Karaoke bar...

Online ryevac

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 ;D :thumbsup:
The only way to fail is not to try.

 

 

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