Even though a lot of them want an expensive EV.
Earlier this year, Adrian Hallmark was appointed CEO of Bentley, 12 years after he left the company. Hallmark was responsible for overseeing the original Continental GT and is now back just in time to see the new model enter the market. Bentley is currently facing some tough times as Europe's Worldwide Harmonized Light Vehicles Test Procedure (WLTP) program caused several models, including the Continental GT and Bentayga Plug-In Hybrid, to be delayed for testing. Now, it seems as though Bentley has made it past the worst of the issues and is gearing up for a bright future.
In fact, Bentley has been extremely successful in the 12 years since Hallmark's departure. "The brand has gone from 1,000 sales to 10,000 sales to become consistently the biggest ultraluxury brand out there. Although we are not as successful as Ferrari in terms of net profit, we have made money for 13 of the 15 years since the GT was launched," said Hallmark.
The company has potential to grow even further as the number of high-net-worth individuals continues to grow. "[12 years ago] the number of people with more than $1 million in stocks and other investments was six million. That has gone up to 16 million today, and the prediction is it will rise to 20 million by 2025. The irony is that even with 16 million high-net-worth individuals today, only a few tens of thousands per year buy ultraluxury cars." So how does Bentley plan to target those other high-net-worth individuals who don't buy ultraluxury cars? With an EV, of course.
"About 40 percent of our customers would consider buying an EV. But more important, the two major demographic segments that we don't currently sell to - the upper liberals and the post-moderns - account for 40 percent of high-net-worth individuals, and an EV is even more appealing to them than to our customers. They tend to buy Porsche and Tesla now," Hallmark said. We know Bentley will reveal a new EV model by 2025 that will "redefine grand touring," but is waiting for better battery technology.
We won't see an electric Bentley until 2025 because "the problem is, with the size of our vehicles and the frontal area we push through, current battery-power density limits the size of the car with a credible driving range. The Jaguar I-Pace is the perfect-size car for the battery technology, but it's too small for us. It's all driven by power density of the battery, but there's nothing industrialized in the supply chain before 2023, 2024, or 2025. Only then does it open up the size of the vehicle and the category you can make a credible battery-powered car," Hallmark explained.
Even without an EV, Bentley is still on track to have a successful year in 2019. After experiencing delays on the Continental GT, Hallmark says "we are running at capacity, the order bank is good, the car is getting rave reviews, and it's a winner. We did it exactly the same the first time I was here. We delayed that first GT by eight months because it was not better than the Audi A8, and that was the standard."
Now that the Continental is available, Bentley can trend towards profitability. "It definitely won't be a profitable year. Will the last quarter be profitable? Probably. We have gone through the difficult period. This year is a conversion year to a better business model, and next year you will start to see significant growth and a return to normality in terms of profit," Hallmark said.
Bentley currently caps out at 10,000 units per year, though "the market has quadrupled since we launched the Continental GT; our volume has increased by about the same, give or take a thousand. I don't think we could do 40,000 — that would be crazy. The teens are credible, but there's no science to this."