British technology company and renowned vacuum manufacturer Dyson Ltd. plans to manufacture its first electric car in Singapore. According to Bloomberg, Dyson announced its plans to complete a factory in Singapore by 2020 and release its first electric car model by 2021.
Dyson’s recent announcement is just one part of the company’s $2.6 billion effort to expand into the automotive market and to challenge Tesla Inc. to the hottest sector — electric vehicles.
In 2017, more than 73 million vehicles were produced worldwide and more than $4 billion worth of metalworking fluids were globally consumed just for lubricating transportation equipment.
Singapore is one of the costliest places in the world to purchase a vehicle because the city-state doesn’t house any car-manufacturing plants. Still, Singapore isn’t without its benefits.
The city-state is home to the second-largest container port and is also the manufacturing headquarters for various high-tech products. Among these products include the aircraft engines of Rolls Royce Holdings Plc.
“Singapore has a comparatively high-cost case, but also great technology expertise and focus,” said Dyson CEO Jim Rowan to CNN. “It is, therefore, the right place to make high-quality technology loaded machines, and the right place to make our electric vehicle.”
The announcement of Dyson’s move to manufacture electric vehicles in Singapore comes in light of Tesla’s decision to begin establishing a factor in China. Dyson already employs 1,100 people in Singapore at their manufacturing hub that focuses on digital motors.
The region has a free trade agreement with China, which is currently the world’s largest market for electric cars and will remain so until 2040.
“The decision of where to make our car is complex, based on supply chains, access to markets,” said Rowan. The availability of expertise, he adds, will help Dyson achieve its business goals.
Dyson has previously considered using different locations for its car facility including its home base in the UK. However, the UK has been losing the interest of many global companies due to the sovereign state’s plans to exit from the European Union.
Known as Brexit, the UK’s exit from the European Union would cause additional custom checks that would hold up parts of shipments and force automakers to close factories within the country.
“Singapore has only a small automotive industry,” said Ana Nicholls, an analyst with the Economist Intelligence Unit, “but its location in the middle of Asian trade routes makes it very attractive in terms of supply chains.”
Dyson has yet to reveal the type of electric vehicles it will be producing, but the company plans to build the manufacturing plant itself rather than using subcontractors. The construction of the manufacturing plant is set to begin this December.