In a shocking statement released on Thursday evening (10 October), British technology company Dyson announced that it has decided to kill its project to build electric cars.
The big project’s was supposed to have the electric car plant running in Singapore by 2021.
James Dyson, founder of the company that is famously known for its high-tech vacuum cleaners and fans, said in an e-mail to its employees that its team designed an amazing car but had to scrap the project as the electric cars were not “commercially viable”.
“The Dyson Automotive team have developed a fantastic car; they have been ingenious in their approach while remaining faithful to our philosophies. However, though we have tried very hard throughout the development process, we simply cannot make it commercially viable,” the statement read.
Mr Dyson added that they’ve been through “a serious process to find a buyer for the project which has, unfortunately, been unsuccessful so far”.
“I wanted you to hear directly from me that the Dyson Board has therefore taken the very difficult decision to propose the closure of our automotive project,” he noted.
Upon hearing this announcement, the country’s Economic Development Board (EDB) revealed in a statement that since Dyson’s decision to pull the plug for its electric car project was made at an early stage, the disruption to its operations and workforce in the Republic will be minimum.
In September 2017, the 71-year-old British entrepreneur announced that he would venture into a new industry and will be making electric car. Just over a year later, the company said that it would have its first manufacturing facility in Singapore.
Dyson Chief Executive Jim Rowan said: “The decision of where to make our car is complex, based on supply chain, access to markets, and the availability of the expertise that will help us achieve our ambitions. I am delighted to let you know that the Dyson Board has now decided that our first automotive manufacturing facility will be in Singapore.”
He continued, “Singapore has a comparatively high cost base, but also great technology expertise and focus. It is therefore the right place to make high-quality technology loaded machines, and the right place to make our electric vehicle.”
In May 2019, the company even started hiring automotive design engineers and free trade agreement specialists to fill in positions at the proposed vehicle plant. In total, there were more than 100 job vacancies under Dyson, but not all of those were for automotive roles.
“Not a product failure”
Although the electric car project did not take off, Mr Dyson insists that “this is not a product failure, or a failure of the team, for whom this will news will be hard to hear and digest”.
He also highlighted that their achievements have been great “given the enormity and complexity of the project”.
Additionally, the businessman also noted that the company is working quickly to find alternative roles within Dyson for as many employees who worked the project, and there are enough vacancies to absorb most of the people into its home business.
“For those who cannot, or do not wish to, find alternative roles, we will support them fairly and with the respect deserved. This is a challenging time for our colleagues and I appreciate your understanding and sensitivity as we consult with those who are affected.”
According to BBC, Mr Dyson stated that the company will be closing electric car facilities both in the United Kingdom and Singapore, and the project had hired 500 employees in the UK.
The company also said that it will go ahead with its £2.5 billion investment in developing other products like battery technology.
“Dyson will continue its £2.5 billion investment program into new technology and grow our wonderful new University. We will also concentrate on the formidable task of manufacturing solid state batteries and other fundamental technologies which we have identified sensing technologies, vision systems, robotics, machine learning, and Al offer us significant opportunities which we must grab with both hands,” Mr Dyson explained.
He continued, “In summary, our investment appetite is undiminished and we will continue to deepen our roots in both the UK and Singapore.”
Is Singapore still attractive for investment?
Following Mr Dyson’s initial announcement to have the electric manufacturing plant and to relocate its headquarters to Singapore, Minister for Trade and Industry Chan Chun Sing said in a Facebook post last year that Dyson’s decision “testifies to Singapore’s attractiveness as a base for investments in innovation”.
Separately, an article by the Straits Times also stated that analysts believe that Singapore will remain as an attractive investment destination for medium to long term, despite global uncertainties and worrying trade war.
The country has enticed S$8.1 billion in investment commitments in manufacturing and service for the first half of this year, and CIMB Private Banking economist Song Seng Win thinks this will continue.
“Singapore becomes even more attractive given what is happening now. It is neutral, with stable politics, and policy planners who think and execute for the long term.”
On the other hand Maybank Kim Eng economist Chua Hak Bin said that fixed-asset investment for the first half looks promising with commitments from technology firm like Dyson.
“Singapore could position itself to ensure that when there’s an upturn again, it can ride on it… The key is how to get companies to pull the trigger on investment plans, and make sure the country is a part of that,” he said to ST.
Despite positive remarks from Mr Chan and analysts, Dyson’s decision to put an end to its electric car project may indicate that Singapore may not be attractive after all, given the high cost to operate in the country and its stringent policies.
Even Tesla founder Elon Musk asserted that Singapore’s policies are not supportive of electric vehicles.
In a tweet responding to a netizen who asked him if he could “allow us in Singapore to get a Tesla”, Mr Musk wrote: “We tried, but (the) Singapore government is not supportive of electric vehicles.”