Automotive Ecosystem – Dyson C5?

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Not convinced Dyson has what it takes.

• 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:
  • First: Solid state batteries. This 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.
  • This has been a focus of Dyson for some time but whether it has cracked this thorny problem remains to be seen.
  • Second: Electric motors. Given Dyson’s history with household products, there would seem to be a natural progression into electric vehicles.
  • Third: 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.
• I think that there are two critical attributes that will be required to succeed in a world of electric vehicles and Dyson has neither:
  • Automotive experience. As Apple has found (see here), 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 I think will leave it wanting.
  • Digital data. RFM research (see here) has concluded that understanding 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.
  • I see Dyson as firmly in the ship and forget category rather than the ship and remember that I think is essential going forward.
• Furthermore, most of the money in the automotive industry at the moment is made through the financing of vehicles and here Dyson also has no experience.
• Consequently, I think that 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, I think that 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.
• My research leads me to believe that this 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, I am struggling to see how Dyson will compete effectively in this market as it lacks almost all of the core competences that I think are required.
• Furthermore, 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 32 years since arguably the biggest disaster in British innovation (Sinclair C5) but perhaps we are due for an upgrade.