By Ty Duffy
Porsche has been facing a profitability crunch. EV growth has been slower than expected, forcing Porsche to recalibrate its investments. And new US tariffs hit Porsche particularly hard, as it does not manufacture any vehicles in the United States.
Porsche has already raised its prices; a new 911 Carrera now starts at $132,300. A report suggests Porsche could raise additional money by selling its Bugatti stake.
Porsche May Sell Its Stake In Bugatti To Private Equity
According to a Bloomberg report, two private equity firms, HOF Capital and BlueFive Capital, are "in discussions" to buy Porsche's stake in Bugatti. Porsche currently owns a 45% stake in Bugatti, with Rimac Group owning the remaining 55%.
The potential deal would see Porsche sell both its Bugatti share and its 24% stake in Rimac Group for more than $1.2 billion. Per the report, the parties have not reached an agreement on the details yet. But a deal could be announced in the coming weeks.
Bugatti merged with Rimac back in 2021. The ostensible plan called for Bugatti to expand and redefine itself for a new era. Mate Rimac would spearhead development, with Bugatti electrifying its powertrains and branching out beyond two-seater hypercars. Porsche would play a more passive investor role. Previous reports suggested that Mate Rimac was chafing at working with Porsche and was looking for investors to buy Porsche out of its Bugatti stake.
Bugatti Does Have Massive Expansion Plans
Bugatti has phased out the Bolide and is phasing in the new Tourbillon, an 1,800-horsepower V16 hybrid with fancy features like sapphire glass on the dashboard. And the brand is plotting to build a new factory or "atelier" on site in France. Bugatti says the new low-rising, glass-walled facility will allow the brand to double production.
Priorities Are Shifting For Porsche With EVs On The Downswing
One of Porsche's main incentives for partnering with Rimac, an effort that began in 2018, was to help bolster its EV tech. "This joint venture is the provisional culmination of a strategic chain of investments," Lutz Meschke, a member of Porsche's executive finance board, said in a 2021 statement. "We already purchased the first shares in Rimac in 2018 and have successively increased our shareholding since then. We established a close relationship with Mate and his extremely innovative team very early on. We are now benefiting from that."
As recently as 2022, Porsche was pledging to be more than 80% electric by 2030. Essentially, Porsche would have been an EV manufacturer for every vehicle except the 911. That's an environment where having an extensive technological and financial partnership with Rimac made a lot of sense.
Sources: Bloomberg, Porsche
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This article originally appeared on CarBuzz and is republished here with permission.
