Yahoo Finance Dyson scraps electric vehicle plans; questions raised over Hi-P's access to 'Customer D' via SEAMCO acquisition
SINGAPORE (Oct 11): Dyson, better known for its vacuum cleaners before unveiling a bold plan to make electric vehicles, has spiked its EV project.
The EVs are supposed to be assembled here in Singapore – a plan which raised eyebrows in this tiny country with the most expensive car prices in the world.
In an email to his staff, James Dyson, the famed UK inventor who runs the company named after himself, said that the project is no longer commercially viable. He had failed to find a buyer for the designs of the Dyson electric car, unveiled two years ago, too.
“Though we have tried very hard throughout the development process, we simply can no longer see a way to make it commercially viable,” Dyson wrote in an email to his staff on Oct 10.
“We have been through a serious process to find a buyer for the project which has, unfortunately, been unsuccessful so far.”
The company will re-channel its R&D efforts on component technologies such as batteries.
Dyson, who is noted in UK for backing Brexit, has been criticised for shifting his company’s headquarters to Singapore, whose government has been wooing multinationals to set up corporate offices for decades.
When Dyson CEO Jim Rowan met Singapore media in July, he said that Singapore is chosen as Dyson’s base for reasons other than tax.
“It was the capability to get the right people in the right time zone in a market that’s growing quickly for us,” he said.
See: Dyson CEO Rowan says Singapore 'natural choice' for HQ
Besides the electric vehicle assembly plant in Singapore, Dyson already runs a facility building to build motors used in the household products. It has other facilities in Malaysia.
At that briefing, Rowan, when asked, declined to give updates on the electric vehicle project. Plans to assemble the vehicles in Singapore were first announced back in October 2018.
The cancellation of the electric vehicle project will affect around 20 jobs here in Singapore.
One of the more high-profile billionaires in UK, Dyson was personally in the news recently for buying a penthouse in Singapore reportedly worth $73.8 million. The 21,108 sq ft palace-in-the-sky is sited on the 62nd to 64th floor of Wallich Residence.
EV sales drop
Dyson’s plans to scrap its EV project comes amid a slew of negative news for the industry. In late September, NIO, a China-based EV maker said to be a rival to Tesla, reported a heavier-than-expected loss for its 2Q. Loses increased 83% y-o-y to RMB3.29 billion, amid issues such as a call back of cars over potential fire risks.
For the month of July, global sales of electric cars fell for the first time ever. China, one of the major markets, cut back subsidies, causing demand to weaken. According to brokerage Sanford C Bernstein, worldwide sales of electric vehicles fell 14% to 128,000 units. Sales declined in China and North America, but rose in Europe.
Hi-P's road to "Customer D"
Evidently, some companies here in Singapore have been gearing up in anticipation of Dyson's vehicle manufacturing plans.
Hi-P International, which builds precision parts and assembles consumer electronics devices, had recently announced plans to buy SEAMCO for US$31 million. According to Maybank Kim Eng Research in an Oct 10 note, SEAMCO, which makes plastic parts, will Hi-P's access to a certain "Customer D", which is a high profile UK-founded company that gives “enormous growth prospects in consumer electronics and automotive."
"SEAMCO’s capabilities and production footprint appear to complement needs for Customer D’s Singapore-based EV project," states MBKE, which did not specify who "Customer D" is.
In 2015, SEAMCO won Customer D’s inaugural best supplier award, which suggests a strong working relationship. Customer D is well known for its bladeless fans, cordless vacuums and unique hair dryer/styling products.
The report was released less than 12 hours before Dyson's announcement to kill the EV project.
