Questions

1. What environmental factors are behind Dyson’s move into the electric car market
and the moving its operations to Singapore?

1. For Dyson, Singapore investment was premised on market access rather than incentives as
they believe that no amount of government support can remove the need to pour its own
resources into the venture.

2. Singapore has efficient trade links with China, the world’s largest electric car market, along
with the availability abundant engineering graduates, was another reason to consider it over
other contenders that included Britain, Dyson’s headquarters.

3. Its decision not to build in Britain was mainly because, UK government-funding channels
require collaboration with smaller partners, an approach designed to foster a domestic supply
chain. Dysons is reluctant to collaborate with other companies defending its intellectual
property borne out of years of expertise.

4. Singapore’s incentives include tax breaks for five years, which can be further extended, and
R&D grants that can cover up to 30 per cent of the cost of projects that involve product,
application, or process development, according to the Singapore Economic Development
Board.

5. Singapore also offers expensive land at discounted rates. They would have given Dyson a
favorable tax break.

2. What does Sir James mean by ‘Dyson was never a vacuum cleaner company’?

Following are some reasons for Sir James to think about Dyson in way:

1. The company succeeded in almost every product category it has entered with the notable
exception of its washing machines which sets better benchmark for stepping into new market
with new product.

2. The revenues have grown exponentially which they believe is because of the R & D and
technology that they have incorporated in their products thus providing them with sufficient
funds to step into the EVs.

3. Efficient network of suppliers from the existing chain of products offered by them.

4. They have specialization in areas such as batteries, aerodynamics, and electric motors. They
believe in their intellectual property so much that it took more than a year to finalize a
supplier for them. Giving them a upper hand in key factors which determines the cars
performance.

5. Dyson’s other forte is batteries. It already makes 7 per cent of the world’s lithium-ion cells, to
power devices. Batteries could be the make or break for EVs as they are the only component
to watch out for in weight, space, capacity, performance, durability, etc. With their expertise
in it they are ready to strike off major part of building EVs. Being an innovative company that
they could create a revolutionizing energy source that would outperform the lithium-ion
batteries that are currently used in the EV market.
3. Use the Five Forces model to establish how competitive the electric car industry sector
is.

Porters 5 Forces Analysis for the e-Mobility industry

Barriers to Entry – The e-Mobility business has a number of entry hurdles. Electric car
manufacture, for example, necessitates significant expenditures in production lines,
machinery, and technology. In addition, competence in the automobile industry is required
in order to invest effectively. The margins on electric vehicles are shrinking as the cost of
equipment (such as batteries) remains high. Once investments have been made, these
obstacles result in high fixed costs, necessitating more investment capital to obtain a market
share in the beginning, especially for new competitors. As a result, the majority of the
growth in the e-Mobility business will come from traditional automobiles, who already have
the knowledge about processes and the needed infrastructure.

Bargaining Power of Buyers Customers have a choice; brand loyalty might assist purchasers'
power be lessened. The demand for automobiles is extremely strong. Automobiles are a
commodity for both private and business clients. More customers are switching from a
conventional car to an electric vehicle as a result of growing environmental consciousness
and the benefit of long-term fuel cost reductions. The power, however, is with the
purchasers due to intense rivalry and substitution in the business. The minimal switching
costs are another aspect that boosts purchasers' bargaining power. The buyer pays little or no
money to switch from one model to another. As a result, purchasers typically select their
model depending on quality, pricing. and service. An answer to mitigate the power of buyers
is a better customer service and a stronger focus on brand loyalty.

Bargaining Power of Suppliers – Suppliers wield a small amount of authority. There are
numerous companies that offer both the traditional and electric car industries. Furthermore,
for the majority of suppliers, the automobile sector is a crucial market. Manufacturers are
more likely than providing vendors to come up with new ideas. As a result of all of these
reasons, the threat of suppliers is quite modest.

Industry Competitors – The automobile industry's major players are very competitive and
maintain a fierce competition. Various automobile manufacturers compete for potential
electric vehicle buyers. In the electric car business, there is a lot of competitors and a lot of
buying power, thus there is a lot of competitiveness. This is bolstered by a significant
growth rate and a large market forecast for the next 2-5 years. As a result, new companies
(like as Tesla) are entering the industry, resulting in even more fierce rivalry. As a result,
existing important players in the automotive industry are eager to invest a significant amount
of money to make the transition from conventional cars to electric vehicles as quickly as
possible. In China alone, which Dyson sees as its biggest target market, there are more than
300 registered electric car start-ups, many with rich backers and ambitious founders. They
include names such as Lucid, Byton and Nio.

Threat of Substitute Products – The threat of substitutes is quite significant due to intense
competition and developing mobility notions. The rivalry structure of the e-mobility
business is comparable to that of the traditional automobile industry. Despite the fact that the
model mix of electric vehicles is not as diverse as that of conventional cars, the threat of
alternatives remains significant. Traditional modes of transportation (e.g. bus, railway, plain,
etc.) as well as emerging mobility ideas (such as mobility on demand, rideshare,
autonomous driving, etc.) pose a severe threat to electric vehicles. Furthermore, the still
significant price difference between an electric vehicle and a regular car adds conventional
cars to the list of substitutes for EVs