Porsche Boosts Investment in EV
As the price of gas continues to increase, so too does the demand for EVs, with most automakers across the globe spending quite a bit of cash to develop their own EV line. Just recently, there has been an escalation in Porche EV investment. Porsche started working with Rimac, a Croatia-based manufacturer of electric luxury vehicles a few years ago. The headline “Porsche Invests in Rimac” initially hit the press in 2018, when they sunk nearly $500 million into the company. In September of 2019, they increased that stake to 15 percent. In early June, they raised that stake to 24% by adding another $536 million to their investment. This latest increase illustrates the clear expansion of a partnership that will prove strategic to both companies.
A Closer Look at the Porsche EV Investment
Rimac was founded 13 years ago with the aim of making electric supercars with huge horsepower. Today, Rimac Technologies primarily supplies a range of EV components including hybrid batteries, electric motors, and fully operational chassis. Rimac has stated that it will continue to focus on the manufacture of components for high-performance EVs rather than mass produce EVs, making the partnership with Porsche an ideal one.
Porsche is not the only company, though, with an interest in Rimac. They’ve also contracted with Swedish-based Koenigsegg as well as Aston Martin to develop high-performance electric drive components for luxury cars.
Recently, Rimac pushed operations for super-cars outside of its main operations to develop EV components to make the company more attractive to investors. Both are managed by Rimac group, but the separation has helped attract additional investors. The super-car group took over Bugatti, a spin-off of the Volkswagen group, to form Bugatti Rimac. Primarily owned by Rimac, Porsche owns a 45% stake in the operation as well.
Even though Rimac has received several investmencts like the one from Porsche, the largest shareholder remains the company’s founder, Mate Rimac. At the moment, the investment looks to be a fairly solid one, as the total value of Rimac is estimated to be €2 billion.
Porsche has already placed its first order with Rimac for the development of highly innovative series components. The company is hoping that this partnership will be of mutual benefit to both, with Rimac generating new innovative ideas and Porsche excelling at the manufacture of the final product.
Are Changes Coming for Rimac?
Despite the new rounds of investment – or perhaps because of them – Rimac is preparing to make big changes. They are in the midst of working on new headquarters in Zagreb, Croatia that will be home to their corporate offices and the production of Bugatti Rimac as well as the Rimac Nevera. All final assembly of Bugattis, however, will occur in Molsheim, France. As the business improves, Rimac is set to hire more workers and will open more corporate offices in several European cities.
Will Porsche Invest Further In Rimac?
Porsche does not expect to increase its investments with Rimac in the short term. Because Rimac also works with other automakers, Porsche feels that its primary interest will be diluted. Porsche has, however, for many years been stepping up investments in startups with great potential. It has stakes in nearly 2 dozen startups and 8 venture capital funds. Porsche has steadily been investing in technology and this has been paying off as the number of its luxury cars sold is at an all-time high. While Porsche may not invest further in Rimac, they are likely to continue their move toward EV technology to become the premier EV luxury car brand.