Billionaires Do Not Read the News

By December 5, 2017Automotive
Claude Monet Lisant (Pierre-August Renoir, 1872)

New Dyson Electric Car Will Feature ‘Some’ Autonomous Technology

According to an article in Auto Express, famed vacuum cleaner manufacturer Dyson will build an extended-range electric car. Sir James Dyson confirmed that he is investing two billion pounds in the electric car venture in 2020 at a new campus on an abandoned World War Two airfield in Wiltshire. The new car will use Dyson’s solid-state battery technology and will feature ‘some’ autonomous technology.

Dyson told Auto Express that he has had a vision for an electric car for almost 20 years, and that his company will “go it alone” on developing the new vehicle, because he sees nothing that existing car manufacturers could bring to the process.

Sounds familiar?

Do Billionaires Not Read the News?

Another billionaire, with even deeper pockets, is investing huge sums of money and employs thousands of skilled workers to design and build an extended-range electric car from the ground up.

Perhaps Sir James has missed the news, but Tesla’s experience getting a production car to the market has been anything but smooth. Tesla Model 3 production and quality woes prove that while vision and determination, deep pockets, and scores of smart people are very important, volume car manufacturing is difficult.

Building cars isn’t an easy matter. Manufacturing hundreds of thousands of cars every year—and making a profit—is extremely difficult. And, of course, even electric cars must be serviced and repaired from time to time, requiring reasonably convenient access to a service network.

Tesla insistence on “going it alone” and on vertical integration underscores just how efficient traditional carmaker manufacturers are.

What’s Next?

Dyson has gained a reputation of taking an unusual design engineering approach to home appliances, such as bladeless fans and rollerball vacuum cleaners, and selling them—at a premium—to a saturated market. And the company is making money.

However, the automotive industry is notoriously brutal to newcomers and may not let another Tesla to ruin their day. And Tesla’s maverick approach to manufacturing is proven very difficult, to say the least.

Historically, Dyson has kept its technology in-house, but this time Sir James might consider focusing on key electric propulsion technologies, such as batteries and motors, and collaborate on design and manufacturing with an experienced car manufacturer.


Image: Claude Monet Lisant (Pierre-August Renoir, 1872)

  • Robert Brincheck

    Nice article and the ‘not reading the papers’ thesis is a clever approach. It dawned on me after reading this, that the challenge Dyson and other tech moguls are facing on this topic could be described as the entrepreneur’s dilemma. A successful entrepreneur, especially one worth billions, achieved that success by developing an unconventional approach to a an existing product or industry, continuing to believe during the difficult start up phase when everyone assumed they’d fail, and being rewarded for their belief and hard work when successful and changed the paradigm of their industry. Their success teaches them that they are disruptors and therefore smarter than everyone else in an established industry/market.

    The dilemma, at least with respect to their ventures in the auto industry, is that their experience has taught them that others will not understand or reject their unconventional idea therefore there is no suitable partner and they must proceed alone. If they didn’t believe they had this advantage, they would never enter the market.

    This dilemma is amplified in the auto industry because the existing companies have become highly proficient at an incredibly complex task, volume production of automotive bodies, which the entrepreneur’s innovation doesn’t address. They focus on their areas of innovation, assume they’ll outsource the rest and run aground when they discover how difficult it is to produce auto bodies at volume.

    • “… existing companies have become highly proficient at an incredibly complex task, volume production of automotive bodies, which the entrepreneur’s innovation doesn’t address. They focus on their areas of innovation, assume they’ll outsource the rest and run aground when they discover how difficult it is to produce auto bodies at volume.” Completely agree.

      And while outsourcing or value-chain collaboration makes sense, those that point at Apple as an example of outsourcing contract manufacturing are, too, misinformed about automotive manufacturing and outsourcing ecosystem. One suggestion I made was for Tesla to not only use Magna Steyer for its experience and capabilities, but also because Magna is under pressure to improve its financial performance, so Tesla could have a significant leverage in more than one way.