VACUUM cleaner innovator Sir James Dyson has unexpectedly – and expensively – just slapped the embryonic EV industry in the face, firing a warning shot over the sea of would-be car-makers scrambling to create fleets of low-emission electric cars.

His much-hyped foray into car manufacturing switched off late last year and the businessman now admits what many EV wannabes may also be silently fearing – the EV is too expensive.

In an interview with the UK’s The Sunday Times – his first about shuttering the EV project – Sir James said the car, dubbed N526, was very expensive to make and he would need to sell each car for $A280,600 just to break even.

He said OEMs making EVs were “making huge losses on every electric car they sell” in a bid to lower their fleet emission average which, in turn, makes them comply with ever-stringent EU legislation.

“Electric cars are very expensive to make,” he said in The Sunday Times interview.

“The battery, battery management, electronics and cooling are much more expensive than an internal combustion engine.

“I don’t have a fleet. “I’ve got to make a profit on each car or I’d jeopardise the whole company. In the end it was too risky.”

Sir James, the richest man in the UK with a net worth of $A30.3 billion, said ending the EV project was with “huge sadness and disappointment”.

“Ours is a life of risk and of failure. We try things and they fail. Life isn’t easy,” he told the newspaper.

Dyson wrote off $A935 million as the N526 project ran out of steam. That money came out of his own pocket as Dyson is a private company, not owned by shareholders.

It also meant the end of plans to manufacture the car in Singapore, although Dyson already has three factories in the city state making electric products including vacuum cleaners, fans and hairdryers, and another one specifically for the brushless electric motor design used in all Dyson products.

The investment also included the redevelopment of an RAF airfield in Hullavington in the UK county of Wiltshire as an R&D centre.

The end of the Dyson EV reflects growing concern about the viability of bringing alternative vehicles to the market and, more specifically, of the ability of prospective car-makers to start from ground up.

The start-ups – including Dyson – are increasingly facing competition from existing OEMs who are already each investing billions of dollars into EVs. These are OEM companies that are well entrenched in global manufacturing, component sourcing and marketing.

Volkswagen, for example, has said it would invest more than $A50 billion in electrification of vehicles by 2023. It said it planned 70 new pure EV models by 2028 and proposed to make 22 million EVs within a decade. To help the EV’s viability, Volkswagen has partnered with Ford by sharing costs of the platform.

Put that against Dyson which proposed an investment of $A3.75 billion into R&D, with half going to the car and half to the battery technology.

Now analysts are wondering what Dyson is going to do with the numerous patents attached to its EV and solid-state battery technology.

Perhaps Dyson will follow its previous path of licensing the technology, much like it has done with its bagless system applied to vacuum cleaners and which has become a highly profitable revenue stream. This licensing could be bought by start-up companies that would have, in kinder times, been Dyson’s automotive rivals.

Dyson’s road to the EV and into Singapore started when it pulled out of manufacturing its household products in the UK in 2002 with a move to Malaysia. It added Singapore factories from 2013.

Dyson proposed its plans to enter the EV market in 2017 and that it would allocate $A3.75 billion to develop and market a three-model EV range.

The 2500kg car was touted as having the longest range of any EV currently on the market, claiming 960km per charge because of its solid-state lithium-ion battery pack. It also claimed 400kW/650Nm and acceleration of 0-100km/h of 4.8 seconds.

By comparison, the Tesla Model S has a 600km range but is far quicker, taking 2.6 seconds to 3.8 seconds (depending on motors and batteries) for the 100km/h sprint.

The Dyson car, of which one was made to prototype driving status, is also a large vehicle, with seating for seven people, an overall length of 5m long and a height of 1.7m.

By Neil Dowling