Electric hypercar group Rimac to take control of VW’s Bugatti

Rimac, the Croatian electric hypercar start-up, will take control of Volkswagen’s Bugatti brand in a deal that cements its position as an established automotive force.

The new company will be called Bugatti Rimac and be led by Mate Rimac, who founded the eponymous group in 2009 in his garage and has grown it to become one of the industry’s most called-upon technology providers.

The company’s electric and battery systems have found their way into cars from Aston Martin and Pininfarina to Jaguar, and the racing arm of VW’s Seat brand.

Being controlled by an electric specialist is also a major departure for Bugatti, which markets its hypercars on 16-cylinder engines and guttural tones.

However, the advent of battery technology has led to speeds that even the most highly-tuned combustion vehicles struggle to match: the upcoming Rimac Nevera is expected to be the fastest model ever built, a title previously held by the Bugatti Chiron.

Rimac said Bugatti would have an electric model this decade but would still produce hybrid models by the end of that period. “We can have two parallel, very distinct product lines,” Rimac said, likening a Bugatti to a Swiss watch and a Rimac to an Apple Watch.

Under the deal announced on Monday, Rimac, which is backed by Porsche and Hyundai, will own 55 per cent of the new company, while VW’s Porsche brand will own the rest.

That means Porsche will control 58.2 per cent of the final company through its existing shares in Rimac if its Rimac stake is included, though the businesses said that the carmaker will not have a say in how the combined unit is run. No money changed hands through the deal, Porsche boss Oliver Blume said on Monday.

It also brings Rimac further under the VW umbrella as the German company embarks on a €35bn electric push, although the Croatian company will spin out its business unit that builds technology for other carmakers.

Both Bugatti and Rimac will continue developing their brands, and while Bugatti’s production will remain in France, all of its research will move into Rimac’s new headquarters in Croatia.

Mate Rimac, who is 32, himself holds 37 per cent of the company, translating to a 20.4 per cent stake of the new Bugatti Rimac group.

“Rimac and Bugatti are a perfect match in terms of what we each bring to the table. As a young, agile and fast-paced automotive and technology company, we have established ourselves as an industry pioneer in electric technologies,” he said.

He added that the hypercar business “should be self-sustaining and profitable on its own”.

Separately on Monday, Porsche’s local rival Daimler confirmed that it would bundle three of its luxury brands — AMG, G-Class and Maybach — into one business unit this autumn, to position itself more effectively in the “top luxury and performance segment”.

Porsche’s decision to put Bugatti in a joint venture will raise hopes among VW investors that similar assets within the group, which are increasingly out of step with the company’s attempt to lead the electric transformation, will be spun off or sold. 

Last December, after a clash between VW boss Herbert Diess and powerful German unions, the company’s supervisory board said that there was “agreement on the board that Lamborghini and Ducati will remain part of the Volkswagen Group”.

In May, Volkswagen rejected a €7.5bn offer for Lamborghini from a Swiss-based investment vehicle led by Rea Stark, who also founded an electric vehicle start-up with Toni Piech, the son of VW’s former chair.

But pressure from capital markets to divest these brands has been mounting. “The message is ‘forget the toys’”, said someone familiar with the discussions between VW and investors.