Why Dyson Dumped the Electric Car: CEO Daily
Yes, it’s a long way from designing hair driers and vacuum cleaners to building a car. But James Dyson’s eponymous company is an innovation powerhouse, and I was excited when it decided to dive into the electric car business…and disappointed to learn last week he’d given up.
Why? Fortune’s Jeremy Kahn has done a smart deep dive into what happened that you can read this morning here. But the bottom line is this: while Dyson is one of the most creative leaders in business, he doesn’t engage in magical thinking. Elon Musk’s Tesla and Chinese startup Nio are burning through “billions of dollars annually with no sign of black ink on the horizon.” Dyson wasn’t willing to do the same.
Still, give Dyson high marks for chutzpah, and willingness to spend $2.5 billion on a long shot. His company is already a global leader in electric motors. Key car concepts like airflow and climate control are also a part of Dyson appliances. So why not give electric vehicles a try? But four years later, Dyson concluded he couldn’t make the numbers work. And he wasn’t willing to squander his company’s financial solvency to chase the dream.
That’s too bad. Today’s consumers may appreciate the fact that the cool car companies currently have money to burn. But tomorrow’s consumers would have benefitted from a smart player like Dyson in the game.
You can see what Dyson CEO Jim Rowan had to say about the electric vehicle effort in my interview with him at last year’s Brainstorm Design in Singapore, here. Other news below.
There's a tentative deal between General Motors and the United Auto Workers union that may end the monthlong strike at dozens of the automaker's factories. The strike is still ongoing until the unions decide whether to put the deal to workers in a week or two, or just accept it immediately. Fortune
British Prime Minister Boris Johnson has reportedly secured a provisional Brexit deal with the EU. The question now is whether he can sell it at home, as Theresa May was unable to do. Northern Ireland's Democratic Unionist Party (DUP), which supports Johnson's Conservative minority government, rejected the deal overnight, and it's far from clear that Johnson can get the numbers he needs to clear the deal in Parliament. Bloomberg
Nestlé will run a $20 billion share buyback from 2020-22 following the sale of its skin health division. The world's biggest food firm, which CEO Mark Schneider has been turning around for the last few years, also confirmed its annual targets. Financial Times
A positive sign for the tech world: TSMC, the biggest provider of chips for smartphone makers such as Apple, expects an almost-10% rise in Q4 revenue and is boosting its 2019 capex plan by up to $5 billion, because "5G smartphone growth momentum is stronger than we expected." Reuters
AROUND THE WATER COOLER
Fisher Investments has lost almost $1 billion in assets following sexist comments made last week by founder and chairman Ken Fisher. The City of Boston is the latest to end its relationship with the firm, pulling $248 million. The state of Michigan has withdrawn $600 million of its pension fund from Fisher Investments; Philadelphia's pension board has pulled $54 million; and Fidelity Investments is reviewing its $500 million relationship with Fisher. CNBC
Cheap consumer virtual reality (VR) is on the rocks. Google killed Android's Daydream VR platform this week, and the BBC has now discontinued its own VR project. The British state broadcaster had set up a VR team in 2017, after Facebook launched the Oculus Rift. Big audiences never materialized. Times of London
Yet another Western company has apologized to China for the way it represented its territory. This time it's Christian Dior, which reportedly used a Taiwan-free map of the country in a presentation. Statement: "Dior has always respected and upheld the principle of one China, strictly upholding China's rights and complete sovereignty, treasuring the feelings of Chinese citizens." BBC
Tesla in China
Tesla has made it onto a list of officially-sanctioned automakers in China, meaning the company can finally start making its electric cars there. According to a previous report, Tesla intends to start production at its new, $2 billion Shanghai factory later this month. Reuters