WORLDAUTOMOTIVETECHNOLOGYMANAGEMENTCORPORATE
In The Edge Singapore this week
How about an all-electric car-lite Singapore?
Benjamin Cher
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theedgesingapore.com

June 18, 2018 12:25 pm +08

-A+A
SINGAPORE (June 18): Elon Musk, the American billionaire entrepreneur who is revolutionising transport in space and on the ground through Space X and Tesla respectively, caused a minor stir here recently. In a tweet on May 26, Musk effectively accused Singapore of being unsupportive of electric vehicles (EVs). The Straits Times then published an open letter by its senior transport correspondent in defence, calling out Tesla for relying on subsidies and writing that the company should make its cars cheaper. “Even your latest Model 3 — supposedly a more affordable model — is beyond the budget of most non-millionaires after options are added,” wrote Christopher Tan on June 2.

(See: Why we will all soon be riding in electric cars)

Musk later countered in a tweet: “The results speak for themselves. Singapore is a very prosperous city and yet has very few electric cars.” He also added: “Why have policies that promote a combustion vehicle fleet in a dense city environment?”

The tweetstorm has thrown the spotlight on a seeming paradox. As at April 30, there were 353 EVs on the roads in Singapore, out of a total of 611,939 vehicles. That is barely 0.06% of the total vehicle population. Only seven of those EVs are privately owned cars. And, three of those are Tesla Model S. Yet, the 700 sq km city state has committed itself to sustainable development, declared 2018 as the year for “climate action”, and billed itself as a test bed for technology and solutions to address urban issues of congestion and pollution, among other things...

Why did Dyson pick Singapore to build its electric car?
TECH NEWS
Wednesday, 24 Oct 2018

8:18 PM MYT
by john geddie and aradhana aravindan

image: https://www.thestar.com.my/~/media/online/2...1A72C7E5CF0ED6F


Dyson said the decision was based on supply chains, access to markets and the availability of expertise, which offset the cost factor. — AFP

SINGAPORE: When James Dyson, the billionaire British inventor of the bagless vacuum cleaner, unveiled a plan to build an electric car plant in Singapore, it raised a few eyebrows.

Not only does the land-starved city state have some of the highest average salaries in the world, but it has been nearly 40 years since Ford closed its factory in Singapore, effectively ending car production on the South-East Asian island.

“It is a bit of a surprise because of the cost base and no other car manufacturing plant being here,” said Shantanu Majumdar, a regional director at consultancy JD Power.

Dyson said on Tuesday the decision was based on supply chains, access to markets and the availability of expertise, which offset the cost factor.

But what other factors could have influenced the decision? Why not head straight to the biggest electric vehicle market in the world, China, like rival Tesla?

Here's a look at some of the less obvious pros and cons:

1. High costs vs generous incentives

Compared with other global cities, Singapore has some of the highest average salaries in the world after tax, according to studies by Deutsche Bank. Land available for industrial use is scarce and expensive, and it ranks highly in general cost-of-living indexes.

But aside from its skilled engineers and scientists, for a high-tech firm like Dyson, Singapore offers generous incentive schemes.

Some schemes include tax breaks for five years, which can be extended, and grants that can cover up to 30% of the cost of projects to improve business efficiency. Singapore declined to comment on whether Dyson benefitted from any such schemes.

To shore up productivity in its manufacturing sector, which makes up less than quarter of its output, Singapore has focused efforts on attracting high-end manufacturers and those who adopt automated production processes.

2. Small market vs China gateway

Dyson may have decided to make electric cars in Singapore, but few are likely to be driven here or anywhere in South-East Asia for that matter.

The number of privately owned electric vehicles in Singapore is in single digits, and Tesla CEO Elon Musk has criticised Singapore for not being supportive of electric vehicles.

Singapore is one of the world's most expensive places to own a car because the government strictly controls the vehicle population by charging owners a variable rate for the right to own and use a vehicle for a limited number of years.

In the broader South-East Asia, only 142 electric vehicles are forecast to be sold this year, data from consultant LMC Automotive shows.

By contrast, sales in China are forecast to almost reach 700,000 vehicles this year, more than double the combined sales from the United States and Europe.

But with one of the world's busiest ports on its doorstep, Dyson can roll a car off the production line in Singapore and within the hour it can be on its way to China or other sizable electric vehicle markets like South Korea or Japan.

Dyson products – which also include bladeless fans, air purifiers and hair dryers – are becoming a premium brand in China and other Asian markets. Asia accounted for more than 70% of its growth last year, the firm said.

3. Familiarity vs new frontier

Dyson's history with Singapore probably also played a role.

It already employs 1,100 people in Singapore, making 21 million digital electric motors a year. It also has manufacturing hubs in Malaysia – connected to Singapore via two road bridges – and the Philippines.

“This is obviously a surprise but since Singapore is at the heart of South-East Asia, Dyson would be best placed to source many components from neighbouring countries and, locally, assemble and manufacture the high-tech car here,” said a corporate banker who deals with multinational firms in the region.

Another option for Dyson could have been to follow rival Tesla to the biggest market, China.

By the time Dyson's first car is ready in 2021, Tesla may already be selling locally produced cars in China after it signed a deal with the Shanghai government for an 860,000 square metre plot of land to build its first overseas Gigafactory.

But China is becoming a crowded market for making electric vehicles and the government is reining in subsidies.

Meanwhile, Singapore does have an extensive free trade agreement with China which lists various car types and car parts in its tariff-reduction schedule.

Singapore's Economic Development Board did not immediately respond to a request for comment on whether electric vehicles would be eligible for exemptions under this arrangement.

JD Power's Majumdar said intellectual property would be another consideration for Dyson.

“Intellectual protections are very strong in Singapore... It is definitely an advantage. When you are in China...you may not be so comfortable on that part.” – Reuters


Read more at https://www.thestar.com.my/tech/tech-news/2...TO3DSPREjJ0x.99

Hype over Dyson’s Singapore electric car plant is a load of hot air
While Britain is busy soul searching over Dyson’s move to open an electric car plant in the Lion City, too few are asking the question: will the plan work?
Nitin PangarkarNitin Pangarkar
UPDATED : Thursday, 1 Nov 2018, 7:32AM

News that the British company Dyson would be locating its much-anticipated electric car plant in Singapore blew through the British media like a blast from a super-charged hair dryer.

“Britain doomed to humiliation”, boomed a headline in The Daily Telegraph, one of many British media outlets that detected in the decision of Sir James Dyson a tacit commentary on the nation’s torturous negotiations for leaving the European Union.

That Sir James chose a former colonial outpost for the plant no doubt rubbed salt in the wounds for many, including the Telegraph’s commentator – one Boris Johnson – but amid the national soul-searching prompted by the news, one factor was largely overlooked: whether the Lion City plant will actually be a success.


Indeed, there’s a good argument that Dyson has misjudged both his move to the electric car market and the move to Singapore – in which case, the humiliation could well be all his.

Dyson has a formidable reputation, but it was earned in a vastly different market – that of high-quality appliances. Much like Apple, his company places great importance on R&D and design, and as with Apple, loyal customers are willing to pay more for Dyson appliances even if they are priced significantly higher than similar (but possibly less well-designed or attractive) offerings from competitors.

That’s Dyson’s strength. But we should be sceptical of applying this model to car making.

Cars are extremely complex products with more than a thousand parts, which makes it challenging to achieve high product reliability. Dyson can reduce the complexity by replacing a traditional engine with a battery, but it will still have to bring together several hundred other parts – not least among them suspension and transmission – to make the car work smoothly.

And in these areas, traditional manufacturers have far more experience. Customers will be unforgiving if Dyson’s vehicles give any less of an experience regarding fit, finish and smoothness of the ride – especially if the cars, like Dyson’s other products, are priced at a premium.

Even in the traditional market, any new car manufacturer faces three barriers to entry and things will be no different for Dyson.

First, the company needs to create a network of suppliers. While there is no shortage of suppliers for parts that make up suspension, climate control or transmission systems, they are likely to prioritise customers who already buy in large volumes over a newcomer whose success is less certain.

Second, it needs to create a sales and service network. This is a huge task, and the more cars you want to sell, the huger it gets. Brands such as Toyota and Volkswagen have established their networks over decades. By selling at a premium, Dyson can reduce the required reach of its network (eg, expensive cars are typically sold in big cities) and build a cushion in required cost competitiveness (high margins allow a less efficient operation), but this would still be a monumental task, even if it can persuade customers to pay more.

Third, it needs to build a reputation for the quality of its cars. It is unlikely the reputation Dyson has earned from making hair dryers, hand dryers, fans and other appliances will carry over into cars. Building a reputation requires years of effort and any missteps will create negative impressions that are difficult to reverse.

The relative infancy of the electric car market throws up further problems and uncertainties for Dyson to deal with. For instance, it is by no means certain that lithium ion batteries will power the electric cars of the future. If an alternative technology emerges, a company that is committed to the current dominant design of Lithium Ion batteries may be caught flat-footed. Dyson itself tried solid state battery technology through battery specialist Sakti3, a start-up that it had acquired, but recently gave up this approach.

Meanwhile, there will be plenty of competition – both from traditional car makers and aspiring new electric firms. Many powerful traditional car makers such as Volkswagen and BMW are moving aggressively into electric cars. They have the advantages of established supply, sales and service networks, brand reputation and large capital bases. They will continue to benefit from the sales of traditional cars, which will give them stable sources of revenues, even as the focus shifts to electric vehicles.

Given all these hurdles, Dyson’s decision to locate the plant in Singapore is a curious choice – unless perhaps the company was offered an incentive to do so, though at this stage that is just conjecture.

In addition to the network of suppliers, car making requires large amounts of space, power and water – none of which are in abundance in Singapore.

The timing is also strange. The car industry is surrounded by uncertainty. The sharing economy and improvements in public transport mean many millennials see little point in buying a car. The increasing popularity of teleworking is also hitting demand. Even traditional manufacturers like Mercedes are investigating new strategies that embrace car sharing.

In other words, the prospects of the industry itself (traditional or electric) are as uncertain as those of any individual manufacturer.

Against this backdrop, any newcomer’s path to survival and success will be far from smooth – and anyone who claims otherwise is full of hot air.

Nitin Pangarkar is an Associate Professor in the Department of Strategy & Policy at the National University of Singapore (NUS) Business School