Chinese vacuum maker Dreame winds down carmaking project, state media reports

Chinese vacuum cleaner company Dreame has abandoned its ambitious plan to produce luxury electric vehicles next year, according to state media reports. The decision, described as a "proactive strategic choice," was announced by the company on Wednesday. Codenamed Star Project, Dreame's electric vehicle venture aimed to expand beyond domestic products in 2025 and reportedly sought to build the world's fastest car.

In February, Dreame had outlined plans for showrooms in several Middle Eastern countries, including Iraq, Saudi Arabia, the United Arab Emirates, and Qatar. Chinese automakers have been engaged in a competitive price war, according to the report.

Dreame cited various factors, including the auto industry's research and development cycle, production demands, market competition, and other considerations, in its decision to withdraw from the automotive project. The company stated that the EV project had not progressed to commercial mass production or significant heavy-asset investment, suggesting that the withdrawal would not have a material adverse impact on its operations or financial condition.

The intellectual property, technical expertise, and other research outcomes from the project will be redeployed across areas like smart mobility, robotics, and broader R&D initiatives, according to Dreame. The workforce, which had peaked at nearly 1,000 employees, has been reduced to a few dozen staff who will handle tasks such as supplier settlements and corporate deregistration.

Senior executives are seeking new opportunities, and layoffs and resignations have left many areas of the project's offices vacant, as reported by Yicai.

Dreame maintains that its core business is operating normally, focusing on four core areas: smart homes, outdoor living, smart mobility, and embodied AI. The company showcased its Nebula NEXT 01 sports coupe and NEXT 01X luxury SUV concepts at the Beijing auto show in April and May, and aired a Super Bowl advertisement for the project in February, costing $10 million.