- Canadian billionaire Lawrence Stroll is the newest investor in Aston Martin, with Reuters reporting that he dropped more than $240 million on a 16.7% stake in the company.
- Aston has been struggling financially as of late, but its new DBX SUV could help ease that.
- Stroll’s investment will come with some shakeups to Aston, including a change in its Formula One structure and, most notably, to its plans for electric vehicles.
- In terms of EVs, Aston Martin will push the planned onset of its planned luxury EV brand, Lagonda, from 2022 to 2025, and the Rapide E electric model has been paused indefinitely.
- Visit Business Insider’s homepage for more stories.
Aston Martin, whose financial performance hasn’t been near the performance of its luxury supercars lately, just got a much-needed cash influx from Canadian billionaire Lawrence Stroll.
But with that extra cash will come a few changes, including major delays to Aston’s electric-vehicle plans.
Reuters reported the investment from Stroll on Friday, saying that he’s agreed to buy up to 20% of the company and rename the Formula One team he owns after it. (Stroll bought the Force India F1 team in 2018, renaming it “Racing Point” and bringing his son onto the driver lineup. Red Bull Racing, the F1 team currently associated with Aston Martin, announced on Friday that 2020 will be its final season with the automaker as its title partner.)
Stroll will pay more than $240 million for a 16.7% stake in Aston, Reuters reported, but that could eventually rise to 20%. He’ll also join Aston’s board as executive chairman, and with his investment will come major changes to Aston’s EV plans. The introduction of the company’s planned luxury EV brand, Lagonda, will be pushed back from 2022 to 2025, while Bloomberg reports that the Rapide E — Aston’s first electric model that Bloomberg describes as “almost complete” — will be paused for review.
The Rapide E has been iffy for some time, despite Aston announcing a “production ready” version in April 2019. When it was announced, Aston said it would make roughly 601 horsepower and that the production run would be limited to 155 vehicles.
The new investment comes with a lot of changes, but securing the extra cash wasn’t just for fun — Aston Martin, despite its ultra-luxury aura as a car brand, hasn’t been doing too well financially. The changes include the F1 restructuring, as well as the delays to Aston’s electric-vehicle investments as a part of “cost-cutting measures,” Reuters reports. Not much was reported about the specifics of the cost cuts, such as where they’ll come from.
Lagonda was supposed to relaunch as an all-electric luxury brand in 2022, with Aston showing off the Lagonda All-Terrain Concept early last year as a “first glimpse of the first production model from the luxury brand exclusively driven by zero emission powertrain technologies.” With Stroll’s investment, the Lagonda timetable is now three years later than planned while the Rapide E remains on indefinite pause.
Stroll’s investment also comes at an uncertain yet cautiously optimistic time for Aston. The company’s new DBX SUV recently debuted as a model to capitalize on the SUV and crossover boom in the car market, and the outlook for it is positive. Simply having an SUV offering is a major sales booster, even for supercar brands, to the point that Lamborghini’s relatively new Urus SUV accounted for nearly 60% of its sales for the first half of 2019.
Lamborghini’s worldwide half-year sales increased by 96% over 2018 after the introduction of the Urus, proving one thing: that SUVs sell, even for brands that haven’t historically made them. The DBX is likely to provide a similar boost.
Both Stroll and Chinese automotive company Geely were in talks with Aston, but the Financial Times reports that the company ultimately “strongly favored” Stroll’s deal to Geely’s. The Financial Times reports that Geely, which owns brands like Volvo Cars and Lotus and continues to expand its ownership of companies in the automotive sector, wanted to accelerate production of new EVs and share technology from its other brands with Aston.
But the Financial Times wrote that there was the potential to drown in Geely’s widening array of companies, while Stroll offered the company the ability to focus on its strengths: supercars and racing, even at the cost of electric innovation.
Whether or not that was the right move for Aston, we’ll just have to wait to find out.
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