What the wealthy want: Aston Martin’s EV rethink reflects luxury market preferences

A significant shift is underway at Aston Martin as the luxury carmaker pumps the brakes on its electric vehicle ambitions.

Citing concerns that fully electric cars are “too extreme a step” for many of its affluent customers, Aston Martin is delaying the launch of its first battery-powered vehicle for the second time.

The company has also announced plans to cut 170 jobs and reported widening losses, adding to the sense of a company at a crossroads.

Hybrid horizon: charting a new course for luxury performance

Adrian Hallmark, who took the helm as Aston Martin’s chief executive last September after departing rival Bentley, believes that plug-in hybrids represent a more palatable option for wealthy drivers.

Despite acknowledging that electrification is an “inevitable and somewhat necessary” trend for the automotive industry, Hallmark argues that many luxury car buyers are not yet ready to fully embrace EVs.

The British marque will now not launch its first EV until “the latter part of this decade,” Hallmark said, and would instead prioritize plug-in hybrids because they combined the best aspects of electric and petrol vehicles.

Aston Martin had originally planned to launch its first EV by 2025 but later postponed it to 2027.

Hallmark’s assessment is based on extensive interactions with Aston Martin’s clientele.

“Having met with 150 to 200 customers in the first couple of months of after I joined Aston Martin, in the luxury market you’ve got the lovers and the non-lovers of electric vehicles – I won’t use the h-word – and there are very few people in between,” he told The Telegraph.

Five years ago, there were a lot less people that were pro-battery electric and everybody was anti-hybrid. Now you’ve got more pro-electric and there’s a lot more people pro-hybrid. The reason for that is that most customers can see electrification is an inevitable and somewhat necessary trend at some point in the future, but battery electric vehicles are, for a lot of luxury customers, too extreme a step at too short a pace – so they’re now seeing the value in hybrids.

Beyond nostalgia: the appeal of hybrid performance

Hallmark emphasizes that the popularity of hybrids is not simply about clinging to the past. “It’s not the smell of petrol. Very few people jump out and go sniff the exhaust – that’s an old cliché,” he said.

“But if you look at plug-in hybrids, and the way the power is delivered, you get more torque in the phase of acceleration but you still get all the benefits of combustion engine when the electric motor becomes less efficient at the higher performance range.”

Mounting losses and job cuts: a tough road ahead

The EV strategy shift comes at a challenging time for Aston Martin.

The luxury carmaker announced it would cut as many as 170 jobs, 5% of its global workforce, as its losses widened by a fifth last year.

Hallmark insisted Aston had “the strongest product portfolio in our 112-year history” as the company said annual losses widened from £240m in 2023 to £289m last year.

That was after sales dipped from £1.63bn to £1.58bn, with the number of cars sold falling from 6,620 to 6,030.

Aston Martin has launched an entirely new range of models in the last couple of years, including the DB12, a new Vantage, an upgraded DBX707 SUV and the flagship Vanquish, which has replaced the DBS.

However, Hallmark faces a significant challenge in turning the company around.

Aston had previously promised investors £500m of adjusted profits by the end of 2024 but in the end, only managed just over half of that.

In the past five years, the company’s shares have shed 85% of their value – rising to 97pc since the float.

On Wednesday, Aston said it would pursue a “blended approach” through to 2030, focused on plug-in hybrids such as the Valhalla, before developing a bigger line up of electric sports cars and SUVs.

The company said this was due to “customer feedback and evolving market dynamics,” adding “This will pave the way for the launch of Aston Martin’s first battery electric vehicle, planned for the latter part of this decade.”

This phased approach reflects the company’s strategy to offer a diverse range of power-train options, ensuring an unparalleled driving experience for customers.

This decision comes just days after Hallmark suggested its new car would be a tough sell to some of the brand’s richest customers, with demand for electric vehicles (EV) lagging behind expectations in Europe.

Aston has already delayed its first EV several times. When the company floated on London’s Stock Exchange in 2018, executives originally envisaged reviving the Lagonda brand as an all-electric marque by 2022.

Later, the company talked about launching an electric Aston Martin model in 2025, but then delayed it to 2027 as Mr Stroll said drivers still wanted the “smell, feel and noise” of a petrol sports car.

The luxury car market isn’t the only one struggling with the transition to electric vehicles.

It came as Stellantis, the owner of Vauxhall, also reported a torrid set of numbers, revealing profits had plunged 70% to €5.5bn (£4.6bn) last year.

The company is struggling in major markets including the US, China and Europe.

Sales tumbled by 38% in North America last year due to an ageing lineup of cars and poor relations with dealers, while in China the company is battling cutthroat competition from domestic rivals and saw sales plunge 44%. Europe was only a little better, with sales falling 9%.

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