Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News Mexico
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • Car Cutaways
    • Environment/Emissions
    • Sales By Market
    • Sales and Retail
    • Latest Launches
    • On The Move
    • After BMW driver death, Takata recalls 1.4 million more airbags
      UK cave explorer felt 'humiliated' by Musk's 'pedo guy' tweet
      FiatItaly-MAIN.jpg
      FCA disputes claims it undervalued Chrysler by $5.6B
      BMW badges 3 web.jpg
      BMW sues air conditioning suppliers over price fixing
    • 1STRIKERS-MAIN_i.jpg
      Automakers are cutting 80,000 jobs globally as EV shift upends industry
      U.S. has not ruled out tariffs on imported cars, commerce chief says
      Germany's auto industry jobs boom comes to a halt
      Germany's VDA auto lobby will pick former utility manager Mueller as president, report says
    • BMW badges 3 web.jpg
      BMW sues air conditioning suppliers over price fixing
      Bosch logo.jpg
      Bosch will develop fuel cell batteries in China
      Suppliers to the new Lamborghini Urus
      Yazaki expands from wire harnesses into EV products
    • Suppliers to the new Lamborghini Urus
      Suppliers to the new BMW X2
      Suppliers to the Dacia Duster
      Suppliers to the new Audi A8
    • Italy sales rise 2% in November on self registrations
      Russia will support car sales with $78M loan subsidies, reports say
      European sales rise 9% in October, driven by WLTP rebound
      Italy sales rise 7% in October in WLTP rebound
    • Italy sales rise 2% in November on self registrations
      McLaren looks to Asia, hybrids as it moves toward potential public offering
      China raises 2025 electrified-car sales target to 25%
      Spanish sales rise 2% in November on jump in self-registrations
    • Porsche promotes Taycan's Tesla-topping recharge speed
      Kia bullish on newest member of Ceed range
      Polestar 1 sets standard for 2-year-old brand
      Opel looks to fix rough EV past with Corsa-e
    • Sato
      Chief engineer appointed to lead Lexus
      German auto lobby picks utilities expert as new head
      Redesigned Land Rovoer Discovery Sport at Guangzhou aut show.jpg
      Jaguar Land Rover names new China sales chief
      Audi shakes up leadership ahead of new CEO's arrival
  • Auto Shows
    • Geneva Auto Show
    • Frankfurt Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
    • Rimac readies 1,914-hp EV hypercar for Geneva debut
      Tesla Model S gets wagon makeover
      Lamborghini Aventador replacement will be a hybrid
      Bentley to move next Flying Spur further upmarket to fight high-end Mercedes models
    • Frankfurt show's visitor plunge could mean its end
      Frankfurt's no-shows, darkened halls signal an industry in flux
      German industry faces an image crisis amid falling sales
      Frankfurt hits and misses
    • Lamborghini concept hints at move to less extreme looks
      Vietnam's first automaker now has names for first sedan, SUV
      view gallery
      8 photos
      VinFast Lux SA2.0 SUV
      view gallery
      8 photos
      VinFast Lux A2.0 sedan
    • VW will launch SOL EV brand in China with subcompact crossover
      view gallery
      9 photos
      BMW Concept iX3
      view gallery
      9 photos
      BMW will export iX3 electric SUV to Europe, U.S. from China
      view gallery
      9 photos
      BMW's iX3 concept heralds electric expansion
    • Pininfarina to expand China team despite market downturn
      Return of the bench seat? Concept EVs show space big enough for sofas
      Lexus plans its first EV for Europe, China push
      Chinese automaker will shun dealers in Europe, U.S. markets
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
    • Alfa Romeo could be Tavares' toughest turnaround
      Formula E races to keep pace with EV technology
      Why Bosch bet big on breakeven chips
      GAC FCA's Changsha plant.jpg
      PSA, FCA must confront excess China capacity under merger
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
    • view gallery
      11 photos
      Renault Captur
      view gallery
      5 photos
      Mercedes-Benz AMG GLB 53
      view gallery
      10 photos
      Mercedes-AMG GLE 53 Coupe
      view gallery
      14 photos
      Mercedes-Benz GLE Coupe
    • view gallery
      8 photos
      VinFast Lux SA2.0 SUV
      view gallery
      8 photos
      VinFast Lux A2.0 sedan
      view gallery
      7 photos
      Toyota Corolla station wagon
      view gallery
      9 photos
      Seat Tarraco
    • view gallery
      4 photos
      Nio ET Preview
      view gallery
      7 photos
      Infiniti Qs Inspiration concept
      view gallery
      5 photos
      BMW 3-series LWB
      view gallery
      9 photos
      Mini Clubman
  • Maps
    • E-Car & Component Map of Europe
    • Powertrain Map of Europe
    • Assembly Plant Map of Europe
  • Supplements
    • Connected Car
    • Talk From The Top
    • BMW 100
    • Car Cutaways
  • EVENTS
    • Automotive News Europe Congress
    • Rising Stars
    • Eurostars
    • Leading Women
    • Meet the winners
  • E-MAGAZINE
    • Read the latest issue
    • Download the app
    • Digital Archives
    • Subscribe
  • More
    • Social Media
    • E-Magazine
    • Contact Us
    • 2019 Media Kit
    • About Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. News Analysis
October 11, 2019 04:52 AM

Dyson decision offers latest sign that EV bubble is bursting

Kyunghee Park, Molly Schuetz and Yoolim Lee
Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Bloomberg

    The famed maker of vacuum cleaners and hair dryers couldn't find a way to make its EV project commercially viable.

    Dyson's sudden decision to scrap its $2.5 billion electric-vehicle ambitions is the latest reality check creeping into the once soaring EV industry.

    The famed maker of vacuum cleaners and hair dryers couldn't find a way to make the project commercially viable, billionaire James Dyson said in a letter to staff Thursday. The announcement came about two years after the company first disclosed its plans to jump into car manufacturing.

    Dyson represents one of the most high-profile players to pull out of a sector that's attracted hundreds of startups in recent years seeking to become the next Tesla. But there are mounting signs that the bubble is bursting as China scales back handouts in the sector and competition heats up. Sanford C. Bernstein estimates that global EV sales fell for the first time ever in July and dropped by a record 23 percent in August.

    "Tesla's future remains uncertain. Almost all the EV startups trying to follow look challenged," Bernstein analysts, including Max Warburton and Robin Zhu, said in a report that cited the Dyson decision as a worrisome development in the industry. "Most of these startups will likely fold. The truth is barriers to entry in autos remain high. Making cars is hard. The move to EVs will be expensive."

    Take the case of China's Nio, one of the most prominent electric-car makers in a country that makes about half of the world's EVs. Last month it reported a wider-than-expected quarterly loss, leading the stock to tumble to a record low and prompting analysts to openly question the company's viability. The shares jumped on Tuesday after Nio reported third-quarter deliveries exceeded the company's forecast, but the stock has since erased all those gains.

    Elsewhere in China, Lifan Industry Group and Zotye Automobile have had to issue statements denying speculation that they're planning to file for bankruptcy, though the former conceded it's under liquidity pressure.

    The competition is also getting tougher. Besides Tesla, traditional automakers such as General Motors and Volkswagen Group are throwing massive resources into electrification. VW has vowed a $33 billion push to bring battery-powered autos to the masses. Apple has had an automotive project since about 2016, although it is said to have scaled back its ambitions.

    There are growing concerns that the ample supply of cheap funding for new-age carmakers is about to dry up, according to Bernstein.

    As to Dyson, the company said it plans to continue its 2.5 billion-pound ($3.1 billion) investment program into new technology, and will concentrate on manufacturing solid-state batteries and other technologies including machine learning and robotics.

    "Singapore will play an important role in Dyson's growth plans," Tan Kong Hwee, assistant managing director at Singapore's Economic Development Board, said in an emailed statement Friday. Despite Dyson's decision, Singapore "remains interested in advanced manufacturing activities, including for EVs," he said.

    Experts had questioned the company's costly plans to build an electric car plant in Singapore, where average salaries are among the highest in the world. Ford Motor closed its factory in the city-state about 40 years ago, effectively ending car production on the island.

    "If everybody else is building a plant in China at a fraction of the cost in terms of labor, it didn't make a lot of sense for anybody to build that size of a manufacturing facility over there," said Steve Man, an analyst at Bloomberg Intelligence in Hong Kong. "I hope Singapore wasn't expecting much from this."

    Still, Singapore has much riding on Dyson in its efforts to attract startups and advanced technology companies. Dyson became one of the biggest global industry names to ever relocate there.

    There's another sector Dyson is looking to invest in Singapore. The family office of James Dyson has incorporated in the city state and is in the process of hiring IT and finance-service staff, according to job advertisements posted on Dyson's website. The family office was established in 2013 and employs about 55 people globally.

    "It would have been nice to have but the reality is OK, it's not going to work. Let's look at something else," said Song Seng Wun, an economist at CIMB Private Banking in Singapore. "It's still about making money."

    Monthly E-Magazine
    View latest issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Automotive News Europe Monthly E-Magazine

    Sign up to receive your free link to each monthly issue of Automotive News Europe as soon as it's published.

    GET THE E-MAGAZINE
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • 2019 Media Kit
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    Automotive News Europe
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • Car Cutaways
      • Environment/Emissions
      • Sales By Market
      • Sales and Retail
      • Latest Launches
      • On The Move
    • Auto Shows
      • Geneva Auto Show
      • Frankfurt Auto Show
      • Paris Auto Show
      • Beijing Auto Show
      • Shanghai Auto Show
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Maps
      • E-Car & Component Map of Europe
      • Powertrain Map of Europe
      • Assembly Plant Map of Europe
    • Supplements
      • Connected Car
      • Talk From The Top
      • BMW 100
      • Car Cutaways
    • EVENTS
      • Automotive News Europe Congress
      • Rising Stars
        • Meet the winners
      • Eurostars
      • Leading Women
    • E-MAGAZINE
      • Read the latest issue
      • Download the app
      • Digital Archives
      • Subscribe
    • More
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • E-Magazine
      • Contact Us
      • 2019 Media Kit
      • About Us