In order to create a new firm called Bugatti Rimac, Croatian electric supercar startup Rimac stated that it was purchasing Bugatti from Volkswagen. The Financial Times broke the news first.
Mate Rimac, who started the business as a one-man operation in a garage in 2009, will serve as its CEO. Since then, Rimac has grown to be a highly coveted brand, and other established manufacturers have requested the startup’s assistance in producing their own electric supercars.
Why that is is not much of a mystery. Rimac unveiled the Nevera earlier this year. It has four motors, 1,914 horsepower, a top speed of 258 mph, and can accelerate from zero to 60 mph in less than two seconds. The Nevera is anticipated to surpass the Bugatti Chiron as the fastest sports car ever produced.
In accordance with the agreement, Rimac will hold a controlling 55 percent stake in Bugatti, a French automaker with a history dating back to 1911 and known for its expensive supercars like the Chiron and Veyron. The remaining shares in Bugatti will be owned by VW’s Porsche brand. (The firms told FT that despite Porsche owning some stock in Rimac, its total holding will not give it a controlling interest in Bugatti.)
After purchasing Rolls-Royce and Lamborghini, Volkswagen paid $50 million to acquire Bugatti, which it has owned ever since. According to Porsche CEO Oliver Blume, this was an all-stock transaction, which means that no money was exchanged.
Both Bugatti Rimac and Rimac Technologies, a division of the business specializing in the development, manufacture, and distribution of battery systems, drivetrains, and other EV components, will be owned by Rimac Group. Rimac has provided auto parts over the years to Porsche, Hyundai, and, yes, Bugatti.
“Bugatti and Rimac will both continue as separate respective brands, keeping use of the current production and distribution infrastructure,” according to Rimac.
By combining resources and skills in research and development, production, and other fields, Bugatti Rimac symbolizes the organization that will shape the future of both Bugatti and Rimac automobiles.
Both businesses will continue to operate out of their individual locations, but Rimac intends to eventually combine their staff at the $200 million facility it is building in Croatia and expects to open in 2023.
“In the brief but fast growing history of Rimac Automobili, Mate Rimac remarked in a release, “This is a genuinely exciting time.” “We have experienced so much in such a short period of time, but this new endeavor raises the bar significantly. When it comes to the contributions that each of us makes, Rimac and Bugatti are a wonderful combination. We have positioned ourselves as an industry leader in electric technologies since we are a young, nimble, and fast-paced automotive and technology firm.
Rimac predicted that Bugatti would make hybrid models to the end of this decade while also having an electric vehicle this decade.
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How come VW sold Bugatti?
He intends to use that to produce electric drivetrains and battery systems that can be marketed in large quantities, as well as new-generation Bugatti hypercars without having to invest billions of dollars. Despite being lucrative, Rimac, who turned 34 this month, explained why Bugatti was no longer the best fit for the VW Group.
Volkswagen sold Bugatti, right?
Volkswagen announced on Monday that it was ceding management of Bugatti, the legendary automaker whose exorbitantly expensive hypercars are revered by enthusiasts but felt out of place at a business better known for practical Golfs and Passats.
A joint venture between Volkswagen’s Porsche division and Rimac, a young Croatian company that has established itself handling design and engineering projects for major automakers, will include Bugatti, whose Chiron model has a starting price of about $3 million.
The joint company, known as Bugatti-Rimac, will be owned by Rimac to the tune of 55%, and Porsche to the tune of 45%. The company’s 33-year-old founder Mate Rimac will serve as CEO. The businesses omitted financial information.
The agreement destroys a significant legacy left by Ferdinand Pich, who ruled Volkswagen for two decades and turned the organization into a multinational conglomerate. Long before it acquired Porsche, Volkswagen bought Bugatti in 1998 to avoid bankruptcy. This move was widely viewed as Mr. Pich’s indulgence and one with dubious commercial sense. According to Mr. Pich, who was then the CEO of Volkswagen, the inspiration for the project came from one of his sons admiring a replica of a vintage Bugatti in a gift shop while the family was on vacation in Spain.
Porsche CEO Oliver Blume admitted on Monday that the agreement frees Volkswagen up to concentrate on more crucial objectives by removing a source of distraction. A couple of them are switching to the production of electric vehicles and recovering from an emissions crisis.
Will Bugatti switch to all-electric cars?
Major auto manufacturers started electrifying their products only a few years ago. With a goal of further electrifying its whole lineup by 2035, General Motors has committed to releasing about 25 electric vehicles by 2025. Similar measures have been done by Ford, Stellantis, Volkswagen, and other automakers.
On the other hand, some automakers started out with EVs on the market. The industry leader in EVs right now is Tesla, which many automakers use as their standard for electrification. Rivian, Lucid Motors, Fisker, and Rimac have now joined it. Additionally, a variety of EV manufacturers are emerging globally.
The electrification of the majority, if not the whole car industry, is probably due to Elon Musk. Demand is rising, battery technology is exploding, and the infrastructure for charging is improving quickly. Additionally, the world intends to achieve carbon neutrality by 2050.
Some automakers may not switch to all electric vehicles, but they have already decided to electrify their upcoming models. Among them is Bugatti, known for their revolutionary Veyron and Chiron hypercars. The Chiron’s production is coming to an end, and Bugatti’s chief executive just indicated that the hypercar that will replace it will be highly electric.
Is Bugatti suffering a loss?
The world’s fastest and most potent production automobile is the stunning Bugatti Veyron.
A new study by Wall Street research firm Bernstein Research found that for every Veyron sold, Bugatti (and its parent company Volkswagen) suffers a staggering $6.24 million loss.
That number should be treated with extreme caution. Don’t take these statistics too seriously, the report’s authors caution, adding that their projections “are obviously very, very approximate.”
The firm does not provide financial information, but a Bugatti spokeswoman stated, “The quoted statistics of Bernstein Research are not feasible.”
The Veyron is described in the report as “a tour de force of engineering” and “the most ambitious and sophisticated automobile ever put on sale.” The editors and readers of BBC Top Gear magazine declared it the best vehicle of the previous 20 years last month. One could easily argue that it is the most impressive car ever produced.
How then could a fantastic car with a price tag of about $1.5 million lose so much money? The experts blame the extremely low volume and high R&D costs (approximately $1.62 billion) (Bugatti has sold about 40 Veyrons annually since 2009).
The one with the most Bugattis?
Some vehicle collectors want diversity, while others are devoted supporters of a particular marque. According to a press release from Bugatti, Fritz Schlumpf, the man who acquired 30 Bugattis all at once, experienced this. One of the oddest tales in the world of auto collecting is the one involving his enormous collection of historic cars.
When Schlumpf was 22 years old in 1928, he purchased his first Bugatti. He raced the vehicle and even maintained communication with the still-open Bugatti plant. In 1957, Schlumpf and his brother Hans decided to open an automobile museum with a concentration on Bugatti after launching a prosperous wool selling business. An abandoned wool factory in Mulhouse, Alsace, was purchased by them. They only required a few vehicles.
Schlumpf started assembling his collection in 1961. Using a registry maintained by Hugh Conway of the British Bugatti Owners Club, he first made contact with Bugatti owners all around the world. Conway connected Schlumpf with John W. Shakespeare, who was hiding a collection of 30 Bugattis close to his Hoffman, Illinois, home.
Shakespeare received a $70,000 lump-sum offer from Schlumpf. Shakespeare responded with a figure of $105,000. Bob Shaw, a Bugatti expert, evaluated the collection and advised Schlumpf against purchasing the majority of the vehicles due to their poor condition. Schlumpf nevertheless responded with a proposal for $80,000.
After “tough talks, mutual threats, and extortion,” Schlumpf and Shakespeare eventually settled on a $85,000 purchase price after two years of negotiations, according to Bugatti. That works out to $720,000 in today’s dollars, which is still just about a third of the cost of a single Chiron. The cost of delivering the autos to France was included.
The 30 automobiles were hauled to New Orleans by rail before being put on a ship and sailing to Le Havre, France. In 1965, Schlumpf and his brother released a press statement outlining their ideas for a museum, but it never saw the light of day. The Schlumpf brothers finally fled to Switzerland in the 1970s due to the demise of the French textile sector and labor unrest over questionable business practices. In 1977, workers found the buried hoard of Bugattis.
In the end, the automobiles did receive some attention. Schlumpf’s vision of a Bugatti-focused automobile museum was realized when a portion of the collection served as the foundation for the Cit de l’Automobile, a museum established in Mulhouse, Alsace, with support from the French government. Others are included in the collection of the Mullin Automotive Museum in Oxnard, California.
How many Bugattis are there in existence?
Although there isn’t much of a shortage of demand for superbly constructed supercars, for the past seven years Bugatti has drawn celebrities like no other manufacturer. The list of Bugatti Veyron owners reads like a who’s who of celebrities in sports, fashion, and music. It is a private members club that screams extreme riches as well as exclusivity.
The Volkswagen-built Bugatti Veyron, named the automobile of the decade by British auto magazine show Top Gear, has sent heartbeats racing ever since manufacturing began in 2005. And it seems sense that people would want the former fastest automobile in the world, which has a top speed of 431 kph, 1,001 horsepower, and a 0-60 time of 2.5 seconds.
This powerful machine will use a full tank of fuel in 12 minutes, earning it the name of the 1939 24 Hours of Le Mans champion Pierre Veyron, who won the race alongside the fatal Jean Pierre Wimille. It should come as no surprise that upkeep is expensive; it is said that keeping the car maintained annually costs hundreds of thousands of dollars.
The new Bugatti Chiron is only one of the many highly coveted and legendary vehicles that Bugatti has in their lineup, many of which are a little bit more inexpensive than their enigmatic brand leader, but the Veyron will always be in style.
Since the car’s introduction in 2005, only 300 have been sold globally, which isn’t surprising given the Veyron’s standard price of $1,700,000 plus an additional million for the Bugatti Veyron Super Sport Gold and Diamond. Even if you have the money, you shouldn’t take possession of one of these supercars for granted; you may have to wait up to a year to get your hands on one of the most sought-after items in the automotive industry.
The former VW chairman’s wife, Ferdinand Pich, was at the top of the exclusive list of potential buyers in 2005, but the group has significantly expanded since then. Some members of the automotive industry, such as former Bugatti Chairman Thomas Bscher, have given up their spot on the waiting list, but the majority have looked for any means to get the supercar that has been the subject of the most demand for the past ten years.