PARIS/DETROIT (Reuters) - British sports car maker Aston Martin has scaled back production plans for its first electric model after cash-strapped investment partner LeEco pulled out of the project, Chief Executive Andy Palmer told Reuters on Monday.
The result, though, may be an even more exclusive car, aimed at customers who consider Tesla’s (TSLA.O) top of the range $130,000 Model S to be a little too run of the mill.
Aston Martin will build only 155 of its RapidE, about a third of the initial plan, and lean more heavily on Formula One engineering specialist Williams (WGF1G.DE) after the withdrawal of Chinese TV and smartphone vendor LeEco, Palmer said.
The setback and Aston’s response underscore the challenges and risks niche carmakers face as they scramble to address future demand for electrification from consumers and regulators.
While the privately held Aston Martin brand benefits from the endorsement of fictitious spy James Bond, it lacks the backing of a large automotive parent that many rivals enjoy.
“We’ve decided to make this car rare, which will obviously tend to push the price higher,” Palmer said. “Aston Martin now plans to proceed independently, funding further development of RapidE by ourselves.”
Palmer agreed to be interviewed after sources told Reuters Aston Martin’s partnership with LeEco had unravelled.
Unveiling the alliance in February last year, LeEco and Aston pledged to launch an all-electric version of the Rapide S sedan in 2018. But the Chinese conglomerate has since slashed its electric car investments, including its U.S. startup Faraday Future’s planned $1.3 billion factory in Nevada.
Some Faraday suppliers, including seat maker Futuris and media provider Mill Group, have sued the company for non-payment, according to court records.
Spokesmen for LeEco and Faraday did not respond to requests for comment on the end of the Aston partnership. Aston Martin declined to discuss its partner’s business.
Aston returned to profit in the first quarter, a decade after it was sold by Ford (F.N). Now owned by private equity groups Investindustrial and Kuwait’s Investment Dar, the company is rolling out a new model each year under a taut recovery plan drawn up by Palmer, who joined from Nissan (7201.T) in 2014.
Without LeEco’s backing, the sports carmaker, based in Gaydon, Warwickshire, is pushing ahead as sole investor in the electric car, after paring down production and pushing back the launch date to 2019. The plan won board approval on June 21.
Aston will start taking orders next month with 10 percent down payments on the RapidE, priced just shy of 200,000 pounds ($255,000) in its home market before incentives. That’s a significant premium on the 150,000 pound entry ticket for its V12 model, whose 5.9-litre engine develops 470 horsepower.
Batteries will come from a new production facility built by a consortium led by Williams Advanced Engineering, the F1 team’s technical division, with matched British government funding.
Williams, which supplies power packs to the Formula E electric car racing series, also built the RapidE prototype unveiled in 2015.
Beyond the RapidE, Aston’s first full-production battery car will be an electric version of the DBX crossover it is launching in 2019 - hoping for a repeat of the success that greeted its DB11 coupe, with a little help from the latest Bond film.
“The RapidE project was always about learning in readiness for the DBX derivative,” Palmer said. “We can do that through a limited series.”
Reporting by Laurence Frost and Paul Lienert. Editing by David Clarke and Jane Merriman