Analysis: Electrifying Aston Martin
2019 was a year to forget for the illustrious British car manufacturer Aston Martin. Losses surged to £104.3m, compared with a £68.2m loss the year before and shares by the beginning of 2020 were worth 76% less than they were when the car maker floated in London in October 2018. It was one of the biggest flops on the stock market in living memory and the brand was in dire need of a financial injection. Step forward Lawrence Stroll.
Canadian billionaire businessmen, Lawrence Stroll, announced in late January 2020 that he and a consortium he headed, bought a 16.7% stake in Aston Martin for £182 million. The deal also included a £318 million cash infusion through a new rights issue, giving the British car maker a £500 million boost.
In the fourteen to fifteen months since his rescue mission, Stroll has brought the brand back to Formula 1 with an initial 10-year agreement, replacing his former team Racing Point on the grid. Aston’s decision to tie its fortunes to Mr Stroll will see the company double-down on its historic strengths of supercars and racing, aiming to further boost the brand. Aston are a staple car manufacturer in the UK, referred to as the UK’s Ferrari and have provided luxurious automobiles since 1913. They are also the iconic car maker in the James Bond film franchise.
However, with the UK banning all new conventional petrol and diesel cars from 2030, Aston Martin has looked into the electric car market. They have committed to the future with a pledge to build electric cars in the UK from 2025, aiming to steal a march over its rivals, Ferrari and McLaren. Ferrari has only committed to making electric vehicles from 2030, while McLaren is still focussed on hybrid technology. Aston Martin has outlined its ultimate plans to electrify 90 per cent of its line-up by 2030, with Stroll still keen to produce some naturally aspirated vehicles for “enthusiasts” well into the next decade.
To some though, 2025 still seems far away. Had Chinese car maker Geely been successful over Stroll in their attempt to buy a stake in Aston, it is likely that they would have accelerated the electric car production using technology from their current Polestar brand. Stroll decided to delay any advancements in order to cut back on outflows of cash at a time when Aston were struggling financially.
Works were delayed until 2025, and in the meantime, they are currently focused on developing Ferrari-rival mid-engined supercars alongside a hybrid version of the first Aston Martin utility car – the DBX. The hybrid DBX is due later this year and can technically be recognised as the first of Aston’s ventures into electrifying its cars, but its first battery-only model will not be released until the aforementioned 2025. It will be known as the Rapide E, with Aston saying it “has been designed to enhance and build on the feel, character and delivery of the V12-engine Rapide AMR.”
Despite the delays, Stroll is convinced Aston are way ahead of its rivals, due to the 20% stake German car manufacturer Mercedes-Benz has in the company. Mercedes currently provide its V8 powertrain as a starting point for some of the British brand’s vehicles, including the DBX. Stroll remains hopeful that this collaboration will also soon extend to Aston Martin’s new electric vehicles, with Mercedes providing access to its battery packs, giving Aston the upper hand.
In addition to this, the all new Rapide E will be made at Aston Martin plants in the UK, including Gaydon (the Midlands) and St Athan (Wales), rather than at the Mercedes headquarter plant in Stuttgart, Germany. This provides a much-needed boost for the UK car manufacturing industry at a time when the country is struggling to attract the investment required to secure the industry’s future.
Stellantis, the car maker formed by the merger of PSA and Fiat Chrysler, is still weighing up whether to invest in making electric cars at its Ellesmere Port in Cheshire and has been in talks with the UK government for weeks (Financial Times). With the announcement that electric cars will be produced in the UK by Aston Martin, this could potentially encourage other market players to follow, despite Brexit and other complications with car production in Britain.
Aston Martin are definitely not the first car maker to electrify their vehicles, but could be considered one of the first high-end brands to delve into the market. The movement signifies the future for cars globally – big engined, loud, naturally aspirated cars will become a scarcity, with the new, quiet, eco-friendly battery-only models dominating the car market.