The chief executive of Dyson has warned that the global trade war will complicate its decision where to locate the company’s first electric vehicle plant.
The group has shortlisted Malaysia and Singapore, where it already has production facilities, as well as the UK or China for the site as part of its £2bn project to break into the global car industry.
However, global trade tensions have made the final decision on location and the sourcing of parts “a lot more turbulent”, Jim Rowan, Dyson’s global chief executive, told the Financial Times.
About 35 per cent of Dyson’s components currently come from China, but it assembles its products in south-east Asian countries such as Malaysia and the Philippines.
Mr Rowan said China would continue to be a major source of components for the car project, but added: “On the final assembly side, we’re looking at all the different options.”
He added: “It’s actually pretty complicated because you have got to look at what’s the end market, what are the current tariffs, where do you think those tariffs are going in terms of import and export duties, where can you get scale.”
Mr Rowan emphasised that the company’s EV plans were still proceeding as expected: “Plans have not been thrown up in the air at all,” he said.
Dyson’s warning on trade comes days after Chinese carmaker Geely postponed a $30bn initial public offering of Volvo Cars, citing uncertainties flowing from the global trading environment.
Trade relations between the US, China and the EU have shifted, with the US threatening to impose $200bn of tariffs on Chinese goods, on top of $50bn already in place.
China has lowered its barriers to imported vehicles from 25 per cent to 15 per cent, although it has threatened to raise tariffs on cars from the US to a punitive 40 per cent.
Hakan Samuelsson, chief executive of Volvo Cars, this week said the outcome of the trade conflict was “really difficult to predict”.
There has been fevered speculation over the location of Dyson’s potential automotive plant.
Last month the company applied for planning permission to develop several testing tracks in Britain, at the site where the group is currently engineering the line of vehicles.
But Dyson has also stepped up its presence in China, as it increases focus on the market that it expects to dominate the sales, and potentially production, of the cars.
On Wednesday, the British engineering group launched three new home devices in Beijing, the first time a global product launch was held in China.
“It’s a bit of a changing of the guard,” said Tom Bennett, Asia research and development head, noting that Japan has traditionally been the company’s dominant focus in east Asia.
China contributed more than a quarter of the company’s revenue growth in 2017, putting it on track to eclipse Japan as Dyson’s second-biggest market after the US, according to the company.
Last May, Dyson opened its first China R&D centre in Shanghai, where nearly 50 engineers adapt Dyson product designs for the China market.
The products launched on Wednesday are the first concrete results from the new lab: a purifying heater and robot vacuum are equipped with Mandarin language voice recognition software developed in Shanghai.
The product launch is Dyson’s most aggressive move in China yet as it looks to take on domestic competitors such as Xiaomi, the Chinese tech company known for affordably priced consumer devices ranging from smartphones to water filtration systems.
But to do so, Dyson will need to convince Chinese consumers that its higher price tag, often three to four times higher than that of Xiaomi’s, is justified.
So far, Dyson has not announced any joint venture partners for its battery technology group nor plans to assemble its consumer devices within China, in line with the company’s preference for keeping everything in-house.
“We are very prudent in keeping our secrets secret,” said Mr Rowan. “Our job is to make sure that the information we want to remain within Dyson remains within Dyson.”