Rimac and Porsche have confirmed they are forming a joint venture to effectively take control of Bugatti. VW Group, which owns Bugatti and Porsche will off-load the ultra-hypercar maker in the fourth quarter. The Bugatti-Rimac brand will be headquartered in Zagreb, Croatia the home of Rimac Automobili. Rimac’s founder and CEO will head up the joint venture. Mate Rimac is a 33-year-old technical engineering prodigy who established the company bearing his name in 2009. Rimac’s early struggles seem a distant memory, the company has released critically accliamed ultra-performance electric cars. And it’s expertise in developing electric drivetrains has elevated it to the forefront of the electric car industry.
Under the joint venture, two new Bugatti models will be developed, the Chiron and Rimac Nevera. Bugatti will retain production at its current factory in Molsheim, France. VW Group and Porsche will retain senior-level board appointees to oversee the venture. Porsche raised its stake in Rimac to 24-percent at the start of the year. Rimac is 37-percent owned by its founder. The remaining shareholders include Chinese battery maker Camel Group who own 14 percent and Hyundai who own 12-percent.
The Bugatti Veyron was a money loser, while the Chiron has proved to be more profitable. However, VW has never revealed financials other than making the odd non-specific positive statement at corporate meetings. Nevertheless, Mate Rimac has confirmed there will be a pure electric Bugatti Hypercar and Hybrid-combustion engine powered variant.
The joint venture is interesting on many levels. However, the biggest issue is, how will VW Group view Rimac’s investor relations with Camel Group and Hyundai? These competitors could leave VW and Porsche vulnerable to industrial espionage. It may well be, that VW decides to buys out Camel Group and Hyundai shares. Porsche paid $943M for its 24-percent stake in Rimac. So it may have to pay a further $1-2BN to buy out Camel Group and Hyundai.