PINF Pininfarina Spa

By John D. Stoll 

Pininfarina SpA has spent nine decades designing Ferraris, Cadillacs, Alfa Romeos and Maseratis. It now plans to build its own electric "hyper car" that only a sliver of the world's population can afford.

The storied Italian design firm will put a multimillion-dollar car on sale in 2020 as other brands -- including Porsche AG and Aston Martin -- flock to the electric-vehicle segment. Anand Mahindra, chairman of the company that owns Pininfarina, said the battery-powered car fits in a broader "sustainable luxury" market and will be marketed to buyers who tend to be collectors treating automobiles with the same veneration as rare pieces of art.

It isn't a sure bet. Pininfarina is a revered design house that dabbles in several disciplines, ranging from office buildings to fountain-beverage dispensers to video projectors. While it is most known for its automotive design work, the company will be wading into relatively riskier territory by committing to the capital-intensive task of building cars in Italy and relying on a sprawling global supply chain that includes battery procurement.

Tesla Inc.'s struggle to meet demand for its premium sports sedans has been notable, forcing the company to raise billions in operating cash and delay production time lines because of manufacturing problems or procurement hiccups. Mr. Mahindra said Pininfarina's parent builds hundreds of cars a year and the company will buy batteries rather than copy Tesla's more vertical approach.

Chinese-owned Volvo Car is executing a similar move, recently purchasing a performance-tuning firm called Polestar and using that brand to create a high-performance electric car. Volvo's effort, however, will likely be more attainable because of lower price tags and a unique subscription ownership model.

Mahindra & Mahindra Ltd. bought Pininfarina earlier this decade, dishing out about EUR25 million, or roughly $31 million, for control. The deal was aimed at boosting the Indian automotive, information-technology and tractor company's credentials.

While the investment is modest, it secured a well-known automotive brand that can be expected to compete in an increasingly viable supercar sector. Combined sales of Bentley, Rolls Royce, Lamborghini, Ferrari, Aston Martin and McLaren last year rose 6% from the previous year to exceed 35,000, tripling the broader global auto industry's growth pace for 2017.

In an interview, Mr. Mahindra indicated the price tag on Pininfarina's car could come close to EUR2 million and production will be limited to double-digit volumes, but it is a steppingstone for offering more approachable automobiles. A student of Tesla Chief Executive Elon Musk's business strategy, Mr. Mahindra envisions building out the lineup with other passenger cars or sport-utility vehicles, but said the brand will never be aimed at the mass-market.

The global auto industry isn't a stranger to astronomical price tags. Sweden's Koenigsegg Automotive AB, Volkswagen AG's Bugatti and Lamborghini, Ferrari NV and McLaren Cars are among the companies asking several million dollars per vehicle. Many executives say the most exclusive brands will eventually embrace batteries as the primary power source because electric cars can generally out-accelerate conventional ones.

Mr. Musk, for instance, has long touted the performance numbers of Tesla's Model S, which the company says can travel from a standstill to 60 miles per hour in 2.5 seconds. Ferrari Chief Executive Sergio Marchionne has said the Italian supercar maker will move into electric powertrains.

Michael Perschke, a former Audi AG executive tapped to run a new company called Automobili Pininfarina, estimates the new Pininfarina EV will race from zero-to-62 mph in less than 2 seconds, and achieve more than 300 miles of drive on a single battery charge.

(END) Dow Jones Newswires

April 13, 2018 07:44 ET (11:44 GMT)

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