Dyson picks Singapore for first electric car plant

Dyson is to build the first of its electric cars in Singapore, choosing the country over the UK and China to manufacture the product that the engineering brand hopes will come to define its business.

The vacuum maker had shortlisted one of its British sites where the car is being designed as a possible factory location, but opted for Singapore to be closer to its existing production hubs and its potential customers.

The privately owned group is planning to break into the automotive industry with a series of electric vehicles, using its existing knowledge in batteries and electric motors to give it the edge over established manufacturers.

Scheme

It plans to invest £2 billion (€2.2 billion ) in the scheme, with £1 billion into battery technology and another £1 billion into the development and construction of the vehicle itself.

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The company stressed that Britain’s impending departure from the EU, a move supported by founder James Dyson, was not a factor in its decision, which was announced on Tuesday morning to staff by Dyson chief executive Jim Rowan.

“You can’t bring Brexit into the discussion,” Ian Robertson, a non-executive director on the operating board of Dyson, said.

Singapore has trade agreements with China, the largest electric car market in the world, and Japan, and a pending free trade deal with the EU.

“Our existing footprint and team in Singapore, combined with the nation’s significant advanced manufacturing expertise, made it a frontrunner,” Mr Rowan wrote in an email to staff on Tuesday morning.

Its high cost base is offset by “great technology expertise and focus”, he added.

Dyson already manufactures its electric motors in the island country with assembly of its appliances such as hair dryers and vacuums in Malaysia and the Philippines, having ceased UK production more than a decade ago, although Britain remains its global headquarters and where it conducts much of its research and development work.

The company has spent £200 million in the UK at its Hullavington site in Wiltshire, the former air force base that houses 400 staff working on the cars’ designs and engineering.

Scale

Dyson would not confirm the scale of its investment into its new facility in Singapore, its fourth location in the country.

Construction of the new facility will begin at the end of the year, and finish by 2020 to allow the car to be produced by 2021.

It will consider opening additional manufacturing sites for other vehicles in the future, but the company declined to comment in more detail on the plans.

"There will be more than one [Dyson car factory] and therefore we are preparing manufacturing sites for the first phase," said Mr Robertson, a former head of global sales at BMW.

The company plans to make several vehicles.

It was previously reported that Dyson’s plans included three vehicles, with the first having a production run in the thousands to establish a demand for the vehicle and a route to market. Subsequent cars will be made in the tens of thousands, according to people previously briefed on the plans.

However, a question mark remains over which batteries Dyson will use to power the vehicle.

The company had originally planned to use technology it is developing in-house but Mr Robertson said that “all options are on the table”, including buying in batteries from an external supplier. – Copyright The Financial Times Limited 2018