The tech entrepreneur topping the UK’s rich list ditched his plans for an electric car, cutting £500 million of losses in the process. He says the idea is unfeasible – how, then, is Elon Musk’s Tesla working, and for how long?
Talk is cheap. Sir James Dyson confirmed that as he was unveiled this weekend as the richest person in Britain with a £16.2 billion fortune. The serial inventor forged his reputation with success stories like the bagless vacuum, the airblade hand dryer and the supersonic hair dryer.
But he’s admitted defeat in his latest venture, the N526 – better known as the Dyson car. Despite earning £3.2 billion in the last 12 months alone, Sir James has flushed £500 million down the toilet by abandoning it.
The car espouses all the Dyson hallmarks, focusing on efficiency, while creating a new and better alternative.
It’s a fully electric seven-seater SUV, with a range of 600 miles that can reach a top speed of 125mph. The wheels are bigger than any other production car and they, along with quiet-running tyres, provide an ultra-smooth and energy efficient ride. Its seats are specifically designed for comfort, plus the speed and sat-nav directions appear in front of the driver as a hologram.
So why has Dyson scrapped it?
Simply, it’s too expensive for mass market penetration. To cover costs, its price tag would have to be £150,000.
Which poses a question about the most popular electric car currently whirring along some of the cities’ streets – Tesla, made by the bombastic Elon Musk.
Dyson has a successful track record across several decades and has the wealth to back that success up.
Musk has no serious cash, his wealth coming from borrowing against the value of Tesla’s stock, of which he owns 19 percent.
On the stock market Tesla is worth $97 billion, has never made a profit across any 12-month period and has burned through $19 billion of investment.
That’s worrying enough, but guess what Elon’s next move is?
To launch an SUV called the Cybertruck – the top of the range Tri Motor model has a similar level of performance to the Dyson. But even the most expensive model is two and a half times cheaper than what the Dyson would cost.
Musk has a massive ego – boosted a few levels when movie star Robert Downey Jr. picked his brains before he played superhero Iron Man, whose alter-ego is Musk-like creative genius Tony Stark.
But imagination is not intelligence. Dreaming up a fantastic product and selling it at a massive loss is not success.
The other side of this coin is the major car makers.
Does anyone seriously think they don’t know what Elon Musk does about producing vehicles? The resources at their disposal are huge.
Last year, Tesla sold 367,500 cars.
Toyota sold 10.74 million (it used to own shares and work with Tesla before cutting ties in 2017) and Volkswagen shifted more, 10.97 million.
Throw in premium brands like Mercedes, Bentley, Porsche and Ferrari – they can design and produce anything that Musk could in a heartbeat. But they won’t do it unless it makes financial sense.
Musk’s cars are popular because he has been disregarding financial sense. He’s sold a dream scenario to middle-class consumers: to own a flashy car that is green.
That’s until the money runs out – which it will.
The electric cars that make financial sense are BMW’s i3 or Nissan’s Leaf. Corporations like those can use their resources to subsidise the retail prices to make them attractive and they also have a scale that allows them to make savings that Tesla can’t.
Sir James Dyson said: “When we started, it was viable. But when other companies started producing cars at a loss, it became too risky for us.”
As things stand, motorists have two choices. You can buy a car for a reasonable sum that has a range of options and level of style, but destroys the planet.
Or you can forget that and get a small, basic vehicle that is emission free.
Just don’t fall for Elon Musk’s snake oil salesman pitch of having both.
“If you can’t spot the sucker in your first half hour at the table then you are the sucker” is a saying poker professionals often use to describe the game to rookies.
Dyson and the car manufacturers out there must be muttering something similar about Elon Musk and Tesla.
By Chris Sweeney