Aston Martin aims to hit adjusted profit and revenue targets by 2024-25
Car group bids to revive fortunes amid switch of batteries plan from Mercedes to US start-up Lucid
Aston Martin forecast it would hit midterm targets of £500mn of adjusted profits and £2bn of revenues by 2024-25 and said it could eventually sell 17,000 cars a year.
The luxury-car maker, which sold 6,400 cars last year, will ditch official targets for sales when it sets out midterm targets on Tuesday, focusing instead on cash flow, margin improvements and revenue targets.
Owner and chair Lawrence Stroll said the business had the capacity to sell 10-15,000 models a year, with likely sales “maybe 17 [thousand] at its peak in years to come”.
Aston has had a bruising life on the stock market since its initial public offering in 2018, with the group’s pre-tax loss more than doubling last year. After leading an investment in Aston in 2020, Canadian tycoon Stroll is attempting to revive its fortunes and push the group into electric vehicles.
Speaking at the group’s headquarters in Gaydon in Warwickshire, Stroll on Monday claimed he “should be knighted” for his efforts at the business, which he said had involved “saving thousands of jobs” and “investing hundreds of millions into Formula1” through the Aston Martin racing team.
“If you take my investment between both companies [F1 and the carmaker] as a whole, it’s staggering,” he said.
His comments came as Aston Martin ditched a plan to buy batteries from Mercedes-Benz and instead struck a deal with Lucid that will see the US start-up take a stake in the struggling carmaker.
The agreement with Lucid will allow Aston to escape a series of financial commitments it made to Mercedes, which is a significant shareholder in the UK company, in a deal struck in 2020.
The carmaker plans to integrate Lucid’s batteries and driving units into its electric models, which it intends to roll out in 2025. Alongside the transfer of technology, Lucid will take a 3.7 per cent stake in Aston and receive up to £186mn in cash and shares.
Stroll said the deal would give Aston “access to the industry’s highest performance and most innovative technologies for our future [battery electric vehicle] products”.
Under chief executive Peter Rawlinson, who made his name helping to develop the Tesla Model S, Lucid has created highly regarded battery and drivetrain technology. But like rival start-ups, it has struggled to produce the technology on any scale.
Lucid is majority owned by Saudi Arabia’s sovereign wealth fund, which also has a stake in Aston.
Rawlinson said on Monday that the deal “represents a landmark collaboration between Aston Martin, a storied marque with a rich history, including winning at Le Mans and its current successes in F1, and the very best of Silicon Valley innovation and technology from Lucid”.
While the agreement puts Lucid at the heart of Aston’s electric ambitions, the UK company will still use some electric systems from Mercedes as well as engines and in-car technology that date back to the 2020 deal.
Aston had been due to issue new shares and make a large payment to Mercedes by the end of this year. The payment would have given Aston access to Mercedes’ new battery systems for its electric cars.
The 2020 deal with Mercedes was struck when Aston shares were trading above £12, giving the German carmaker a potential windfall. Although Aston shares have rebounded from the record low touched last year, they remain below £4. They were up 6 per cent in morning trading on Monday.
Franz Reiner, who represents Mercedes on the Aston Martin board, said the UK carmaker now had “access to a wide range of Mercedes-Benz technologies, while at the same time giving the iconic British carmaker the opportunity to explore new opportunities”.
The payments to Lucid, whose shares have tumbled in recent years, will be staggered, starting with £26mn and the rest coming over the course of 2025 and 2026. Aston has also pledged to spend at least £177mn buying parts from Lucid, as well as an additional £8mn integration fee.