Pininfarina SpA, the design firm behind classics cars from Ferrari, Cadillac, Alfa Romeo and Maserati, now plans to build an electric "hyper car" as it moves to take on rivals such as Tesla Inc. (TSLA) and Porsche SE in the high-growth "super car" segment, as reported by The Wall Street Journal. (See also: Tesla Bear Sees Shares Crashing 72% By 2019.)
The $2.5 million car will be targeted at a small subsegment of car buyers that treat automobiles with the same veneration as rare pieces of art, according to Anand Mahindra, the chairman of Pininfarina's parent company Mahindra & Mahindra Ltd.
While Pininfarina is known for its cars, its business ranges from designing video projectors to office buildings and fountain-beverage dispensers. Its new luxury electric vehicle (EV) project will be one of its most capital intensive to date, taking on a global supply chain that adds the complexity of battery procurement.
Super Car Segment Sales Growth Tripled That of Global Auto Market in 2017
Palo Alto, California-based EV pioneer Tesla has faced several setbacks in production of its vehicles, including its premium sports sedan, pressuring the company to raise billions in operating cash as it continues to disappoint its investors with production delays. Mahindra & Mahindra indicates that unlike Tesla, the company will not make its own batteries but rather buy them from a supplier. To work around supply-chain issues, Chinese-owned Volvo has bought out performance-tuning company Polestar in its efforts to build its own high-performance electric car.
The Ferrari maker's push into the EV market is demonstrative of a larger industry shift to appeal to a sustainability-focused consumer in all wealth brackets. Mahindra & Mahindra indicates that the multi-billion-dollar battery-powered car, limited to production volumes in the double digits, will fit into a broader "sustainable luxury" market, as reported by the WSJ. The vehicle, slated to hit the market by 2020, will retail alongside high-end brands such as Porsche, Volvo and Aston Martin. Many industry executives expect most all exclusive brands to embrace batteries as the primary energy source in vehicles, given electric cars can generally out-accelerate conventional ones, wrote the WSJ.
The super car sector tripled gains of the broader global auto industry last year, as combined sales of Bentley, Rolls-Royce, Lamborghini, Ferrari, Aston Martin and McLaren rose 6% to exceed 35,000 vehicles. Tesla's Elon Musk says the Model S can accelerate from 0 mph to 60 mph in 2.5 seconds, while the new Pininfarina EV is expected to jump from a standstill to 62 mph in under 2 seconds, traveling more than 300 miles without a charge, according to design company executive Michael Perschke. (See also: Why the Bulls Still Believe in Tesla.)