Did Dyson strike a deal with Tesla not to make EVs?October 20th, 2019
This article is pure speculation. If I were Dyson, and I were looking at the big business picture, I would recognise my dependency on Li-ion batteries.
The cost of my batteries heavily impacts the cost of my vacuum devices to my customers and my margins as well.
Having somebody working towards getting the costs of these batteries down could be a real threat to my business. After all, they could get the costs of the batteries so low, that they could make vacuums which are better and cheaper. Definitely cheaper.
And so seeing this threat develop, it would make sense to mimic the path to get the lower Li-ion costs to maintain competitiveness.
But competing with Tesla in the lowering of battery costs only makes sense if you have a chance. Tesla’s recent statements regarding moving to 1TW of battery cell production is likely far beyond what Dyson is currently willing to do in terms of investing into batteries.
And so the saying goes, “if you can’t beat em…”. If anybody were to take notice of Tesla’s claims to increase battery production and determine the impact, it would be Dyson. But does Dyson really want to make EVs? How hard would it be to talk them out of it? Was it only really a venture they got into to lower the cost of batteries in the first place? Could they secure a deal with Tesla to purchase lower cost batteries and benefit from the best, lowest cost batteries without any more risk of investment? What options would Dyson really have.
If you look at the path of least resistance for Dyson, if I were high up in that company, I would try to secure lower cost batteries as one of my top priorities. When faced with the dilemma of spending billions more, or negotiating a deal with Tesla… I think that if Tesla were to provide a good deal to Dyson, then it would take little convincing.
From a macro-level standpoint, Telsa likely has little interest in getting into vacuums and blow dryers. Though they might contemplate marketing their proprietary electric heaters from their cars.
And should Tesla come into a surplus of batteries, it would be ideal to be in a situation where those excess batteries can be monetised to third parties. So, win-win.
I am TSLA Long. Model 3 Owner. Brother of a Model 3 owner. Son of a Model S owner. I have reservations for Slate Roof and Cybertruck. I am a Tesla speculator and fanboy. I am not a financial advisor. Investing in anything comes with inherent risk.
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