It is difficult to see how Dyson will compete effectively in this market
Vacuum cleaner maker Dyson has announced that it will be producing an electric vehicle that has more hallmarks of the Sinclair C5 than the Model S. Dyson intends to produce a fully electric vehicle by 2020 which will feature solid state batteries, which is one of the holy grails for battery technology as lithium batteries can be extremely dangerous when exposed to physical trauma, overcharging or excess heat, and has been a focus of Dyson for some time (but whether it has cracked this thorny problem remains to be seen); electric motors, which given Dyson’s history with household products, would seem a natural progression into electric vehicles and a premium price - Dyson is sticking to what it knows in positioning its vehicle at the high end but in this segment, it will face fearsome competition.
There are two critical attributes that will be required to succeed in a world of electric vehicles – automotive experience and digital data and Dyson has neither. As Apple has already found, making cars is extremely difficult and requires a lot of upfront investment. Dyson plans to invest $2.6bn in developing its vehicle which is not that much compared to everyone else investing in this space. Consequently, it has a lot to learn and not much money to invest which will leave it wanting.
An understanding of digital data is also vital, the importance of data generation in vehicle is likely to be critical for the success of the OEMs in the long-run. Players such as Google, Apple, HERE and TomTom are pushing hard in this space with OEMs such as Tesla and BMW already working hard to improve their differentiation using sensor data. Dyson’s current product line up does not have any data collection nor does the company have any real experience with regard to using data to make its customer experience better.
Dyson is firmly in the ship and forget category rather than the ship and remember that is essential going forward and most of the money in the automotive industry currently is made through the financing of vehicles and here Dyson also has no experience. Consequently, Dyson is pinning its hopes on differentiating via its battery. Range anxiety and charging are two of the biggest limitations of electric vehicles today and if Dyson can offer differentiation by fixing either of these two problems it may have a chance.
That being said, the secret to solving these problems most quickly lies in making lithium batteries safer rather than using another substrate entirely. According to Amionx 50-80% of the weight of an electric car battery is made up of packaging to protect the battery against the kind of trauma that will cause a battery fire. If the battery can be made resistant to physical trauma, overcharging and heat then the weight of the package can be substantially reduced. This would enable a much higher capacity battery to be used for the same weight giving a big increase in range.
It is likely the solution is going to come before solid state batteries meaning that range will not be something with which Dyson will be able to differentiate. Consequently, it is difficult to see how Dyson will compete effectively in this market as it lacks almost all of the core competences that are required. It will be up against the biggest automakers which are already shipping in big volumes as well as the biggest ecosystems who have tens of billions of dollars to invest.
It has been 17 years since arguably the biggest disaster in British innovation (Sinclair C5) but perhaps we are due for an upgrade.
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