Inside the collapse of Dyson’s electric car dream

Dyson’s electric car project was headquartered at a vast former RAF airfield in Hullavington, Wiltshire

Fred MacGregor/Press Association Images

When the news finally came, there were tears. For some, it was a surprise. For others, an inevitability. At 4pm on October 10, hundreds of employees at Dyson’s vast development facility on a former RAF airfield in Hullavington, Wiltshire, trudged out pondering their future. Yet eponymous company founder Sir James Dyson was nowhere to be seen. The cancellation of the firm’s electric vehicle project, delivered via an all-staff email, was fitting. Dyson’s electric car dream, whose very existence had to be coaxed out of its inscrutable chief executive, came to an end in a similar fashion to how it was revealed. With a whimper rather than a bang.

Yet Dyson had come agonisingly close to unveiling its creation. The company that upended the world of vacuum cleaners and hand dryers had finally produced a driveable prototype of its revolutionary electric vehicle, meant to go up against the likes of Tesla and BMW – an incredible development, given just months previously much of the car’s design hadn’t gone much further than sketches on computer aided design software, and battery and motor testing was ongoing.

The factory to build the cars was planned; the global supply chain was set up; dealership liaison was planned out. There was a fully-developed car in terms of concept, with rolling prototypes built and gliding around the test track. While the owner’s manual wasn’t written, it wasn’t far off, says one staff member.

In the space of 12 months great leaps had been made in the development of the vehicle – necessary ones, given the car was meant to be on roads by 2021 – but every step forward was met with a setback. And setbacks cost money. Ultimately, Dyson couldn’t make the sums add up.

The company’s board, which was juggling development of an electric vehicle alongside maintaining its core business of household appliances, built up over decades of hard work, had a tough decision to make. Go for broke, signing deals to start kitting out a vast Singapore manufacturing facility in which it planned to make the electric vehicle, or throw in the towel?

The company’s founder, James Dyson, was in a bind. Traditional automotive companies needed to embrace the electric vehicle production in order to survive: they had no choice but to gamble. Startups like Tesla looking to enter the industry were venture-backed and steeped in the high-risk, high-reward culture of Silicon Valley. Dyson already had a successful company, and couldn’t bet the income from vacuum cleaner sales on the potential of electric vehicles. He had a legacy to protect.

And yet he wanted to forge ahead with the project, economics be damned. In many ways, this was a personal quest for validation, and an attempt to prove the car industry wrong.

To understand why the Dyson electric car project happened – and where it all went wrong – you have to go back to a time when James Dyson knocked on doors and was ignored. A time before a Dyson vacuum cleaner sat in every cupboard and a Dyson hand dryer in every public bathroom.

This story of the downfall of Dyson’s electric car is based on conversations with former staff members, none of whom can be named, citing non-disparagement and non-disclosure agreements – or fears for their futures.

James Dyson said he had decided to abandon his electric car project after realising it would not be commercially viable

CHRISTOPHE ARCHAMBAULT/AFP/Getty Images

In 1993, after three years of development, Dyson unveiled a cyclonic vehicle exhaust, a small, Thermos-sized and -shaped device that could be slotted into a car’s exhaust pipe to trap 95 per cent of its harmful emissions. “There are 20 million diesel engines in Europe alone,” James Dyson told The Independent at the time. “Every one produces six grams of dirt for every hour it’s used. That’s a huge amount, which goes on to cause cancer and acid rain. I can stop it.”

Not everyone was convinced, though. Despite demonstrating the product on national TV, when Dyson tried to sell big car manufacturers such as Volvo on the idea, he was shown the door. “Until the government shows more inclination to clean up the environment, big business will not do anything,” Dyson lamented. The tech behind it worked, and it served a purpose. But car companies weren’t compelled to cut down on exhaust fumes in 1993, and the Dyson device had one drawback: you’d have to regularly change the filter.

In the intervening years, policymakers have made moves – and the automotive industry has shifted with it – albeit incredibly slowly. All the while, Dyson remembered how callously his proposals for a cyclonic exhaust cleaner had been shrugged off by the automotive industry. And it lit a fire under him that caused him to pursue what one industry expert describes as “a vanity project” that was doomed to fail.

“It was a misguided vanity project and never a goer,” explains David Bailey, professor of industrial strategy at the University of Birmingham’s business school. “I was always scratching my head given the massive capital requirements for the industry and the investment you need to do this technology. I struggled to see how they were ever going to do it. In terms of the wider industry, it simply
shows how difficult it is to create a new car company.”

The economics never added up. “What Dyson underestimated is the difficulty of getting into the car industry,” says Bailey. “There are significant sunk costs and very high capital costs.”

While the company reportedly set aside some £2.5 billion for the electric vehicle project, that pales into comparison with the £50 billion-plus Volkswagen is spending on producing its own electric vehicle – and it has pre-existing experience designing and manufacturing cars. Volkswagen has even recognised that amount isn’t enough, partnering with Ford to share costs and collaborate on ideas. “I think Dyson hugely underestimated what it costs,” Bailey adds.

He worries that Dyson’s heart led his head in the dream of building an electric car – and more importantly, proving those who wouldn’t hear him out in 1993 wrong. “I think he was emotionally invested in this, and it took him way too long to see commercially this was an extremely difficult thing to do,” Bailey explains.

In September 2017, Dyson project N526 came out of hiding. It wasn’t a particularly well-kept secret: the company had bought Sakti3, a Michigan-based tech company that built solid-state batteries, in 2015 for $90 million. It hired executives like Ian Minards, who became Dyson’s global product development director, from traditional car companies. It built out a team of more than 400 staff to work on the project. While many of the 11,000 components estimated by Goldman Sachs to be in the average electric vehicle could be built by Dyson itself, others relied on third-party suppliers – who had to be persuaded to hold manufacturing capacity open for the project. It was meant to be top secret, but Dyson’s electric car plans were fast becoming common knowledge in the industry.

But Dyson never wanted to go public. Its founder is a tinkerer, content to meticulously amend details of products in private until they’re practically complete. He was, according to one source, dragged “kicking and screaming,” to confirm the existence of the electric car project. When he did, there was no major announcement, no cohort of expectant press, no glitzy livestreamed show. It was – like the announcement that the project was closing – done with a matter-of-fact email to staff.

“Some years ago, observing that automotive firms were not changing their spots, I committed the company to develop new battery technologies,” Dyson told his employees. “I believed that electrically powered vehicles would solve the vehicle pollution problem.”

Dyson said he planned to bring an electric car to market by 2020 (a date which later slipped to 2021). There were scant few details, no specifications, no price except an acknowledgement it would be more expensive than most, and not even a definition of the type of vehicle it would be. (Later patent applications indicated it would be a large saloon car.) It didn’t have a design. It didn’t have a chassis. The type of battery that would power the car hadn’t been decided.

Luka Stokic, a vehicle package engineer who worked at Dyson on the vehicle project, said in a public video posted to LinkedIn after being contacted by WIRED that the “media and everyone else will never know how far we got, how much we achieved in the past few years, what tremendous progress we had”. According to insiders, working prototypes had been built, and the decision to install manufacturing equipment at the Singapore factory identified to build the car was being taken – and was the impetus for cancelling the project.

But others said the project was unlikely to even meet its pushed back goal of hitting the roads by 2021. Speedy development was stymied for a range of
reasons.

Costs quickly ballooned, according to insiders. While the core automotive engineers were focused on building prototypes to get out on the road, long-term Dyson employees steeped in the culture embodied by their boss were tinkering with the shape of headlights and the design of the car’s interiors. (“There’s no point doing something that looks like everyone else’s,” said Dyson when he announced the car’s development.) Every minor tweak set back the project’s completion date – and added costs to the bottom line, which eventually led to the decision to halt the project.

While Dyson already had an uphill challenge on its hands developing a car in less time, at a lower cost, and with no prior expertise in automotives, it didn’t help matters by focusing on the minutiae of design rather than the basics of building a car first then making it look pretty later.

The problems extended from the factory floor to the boardroom. People like Ian Robertson, a former BMW executive who joined the Dyson board, and Roland Krueger, a former executive at Infiniti, a division of Nissan, instilled in the Dyson electric vehicle project a traditional automotive mindset that promoted steady caution over quickfire innovation. That line of thinking works well with large budgets and long project timescales, but Dyson was planning on building an electric vehicle, plus the associated logistics, manufacturing and supply chain, in a fraction of the time and at a fraction of the cost of big auto companies. It simply wasn’t feasible.

“We know Dyson were trying to do a broad range of manufacturing activities on the car,” says Sam Cooper, lecturer at the Dyson School of Design Engineering at Imperial College London. “They were very ambitious.” There was also the curiosity of Dyson choosing Singapore as the manufacturing base for its electric vehicles. While everything would be designed in the UK, Dyson had chosen Singapore, where it has also moved its headquarters, to build the vehicles. “That never really stacked up,” says Bailey. “Singapore is not a cheap place to be manufacturing. Their argument was that it was close to their supply chain in Malaysia. Fine, but why not do it in Malaysia or China?”

The Singapore Economic Development Board confirmed in a statement on October 10 that the impact of halting production on their workforce and economy would be minimal – in large part because the plant itself wasn’t up and running yet.

An artist’s impression shows Dyson’s plan for a 10-mile test track for its electric car at its campus at Hullavington Airfield in Wiltshire

Wilkinson Eyre Architects/Press Association Images

It was business as usual right up until lunchtime on October 10. Most of the 498 people based in the Dyson automotive research and design at Hullavington had little indication of what was coming next. Then, at 2pm, senior managers started tapping third-party contractors working on the shoulder and asked them to leave their stations and vacate the premises for the rest of the day due to a confidential company meeting.

When the meeting started in hangar 86 at around 3pm, the message was blunt: a senior Dyson board member told the hundreds of staff gathered around a stage that the project was no longer financially viable. They had run the numbers, and realised the investment required to bring the Dyson electric car to reality was more than had been budgeted. Dyson had lost its competitive edge in a world where larger car manufacturers were ploughing billions into their own vehicles. Dyson couldn’t afford to compete.

Roland Krueger, the head of the vehicle division at Dyson then gave a heartfelt speech: they had built a new automotive company from scratch in four years, and developed a prototype vehicle – though it would never be seen. Within the hour, staff were streaming out of the vast Hullavington facility. They put their IT equipment in one corner of the room, and signed a list in another. Permanent staff then went to one corner, where they were informed about opportunities for redeployment internally; contracted staff went to a fourth corner to learn their fate.

The fact that James Dyson himself didn’t make the announcement in person rankled with some staff members. Then again, Dyson didn’t want to make public the existence of his electric vehicle project. Had he had his way, he would have tried – and perhaps failed – in secret. “I wanted you to hear directly from me that the Dyson Board has… taken the very difficult decision to propose the closure of our automotive project,” Dyson wrote in his all-staff email. “The Dyson Automotive team has developed a fantastic car; they have been ingenious in their approach while remaining faithful to our philosophies. However, though we have tried very hard throughout the development process, we simply can no longer see a way to make it commercially viable.”

Dyson and the board had tried to find a buyer for the British electric vehicle, the entrepreneur told his staff, but in vain. According to at least one person present in the former RAF workshops when the news filtered through the company, and despite reporting to the contrary that the closure was expected, some staff were in tears at the news, which came as a shock.

“We are working to quickly find alternative roles within Dyson for as many of the team as possible,” Dyson wrote in his email. “For those who cannot, or do not wish to, find alternative roles, we will support them fairly and with the respect
deserved.”

It was a big blow for the company, which hoped to become a major player in the automotive industry. But it was a bigger blow for the staff, many of whom will find themselves out of jobs little more than two months before Christmas.

When more than 500 people lose their jobs and a project they’ve spent years of their life on disappears at the push of an email, you’d expect anger. But those Dyson employees willing to talk publicly about the N526 project have looked back with fondness. They are perhaps conscious of the fact that some of them could be relocated within the company; similarly, the Dyson campus is known for its community spirit, and the company for instilling intense loyalty.

Some of them rationalised their attitude in this way: James Dyson himself, given his 30-year involvement in cleaner cars, wouldn’t have pulled the plug unless the business case was really, really impossible to make. He was too emotionally invested to not fight for the project until the last.

“What an amazing team we had at Dyson – all 500 people – and this decision was most definitely not because of a lack of dedication, passion or hard work, because if you ask me, we have absolutely smashed it, and I think that’s something each one of us should be proud of,” said Stokic, the vehicle package engineer, in an emotional LinkedIn video posted the morning after he found out he was out of a job.

Those who spoke for this story asked that their words not be directly quoted and were even concerned about general thoughts being linked back to them. It would, they said, be unprofessional for them to go into too much detail. If, perhaps, they ended up with another job a few months down the line, many said they would be happy to talk further.

So what’s next? For some of the staff, a shift internally; for others, new jobs. We certainly won’t see a Dyson-branded electric vehicle on the roads any time soon. Yet some aspects of the vehicle could live on. As secretly has it has kept details of the progress of its project under wraps, Dyson filed a number of patents for various parts of its electric vehicle.

“When they did that, I thought: ‘This is a funny thing to do, because if you’re going down this route of making a car, why are you unveiling these patents?’” says Bailey. “I thought at that point they were trying to sell the patents to other firms.” That’s a model that many in the automotive industry are following: recognising that developing every part of an electric vehicle in-house is difficult and costly, some big car companies are buying in parts of the technology then need.

On the Dyson website, there’s a quote from the company’s founder. “Having an idea for doing something better and making it happen – even though it appears impossible. That’s still my dream.” Those involved in the project speak emotionally of the innovations that are hidden behind the walls of Hullavington, though they don’t feel willing to go into how exactly Dyson’s electric vehicle was different from the rest – at least not yet. But the failure of Dyson’s electric car project is also a reality check.

British ingenuity has been Dyson’s brand for more than three decades. Pluck and the Blitz spirit – even basing his new project at an old RAF airfield – had been thought powerful enough to compete with established automakers and the cash reserves of Silicon Valley startups. Until it wasn’t.

“Maybe if they’ve got this fantastic technology, they may be able to licence it to other players,” says Bailey. Other elements – including progress on batteries and motors – can theoretically be reused in other sections of Dyson’s core business, like vacuums and hand dryers. Ultimately, the electric car project that Dyson arguably never wanted the world to know about seems destined to be stripped down for spare parts.

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