Rimac’s Real (well, mostly)

Rimac Automobili, the Croatian company that I mentioned, is one step closer to selling its supercar design.  Rimac has obtained ten million Euros (~12 million USD) towards selling its “C1” or “Concept_One” super-coupe.  Investors have contributed this much for a Series A financing round; the company claims it is expanding and developing.

rimaclogoOn the one hand, this looks pretty compelling.  The vehicle itself, with over 1,000 horsepower as currently designed, can embarrass many Ferraris; founder Mate Rimac claims its interior will have every appointment.  Mate Rimac got his start as an e-racer of his own conversions and homebuilts, so he’s not coming in cold.  He’s also selling components to other automakers, and the Greyp electric bike/moped, again gaining practical experience in real-word products and manufacturing.  This is in Eastern Europe mind you, with low wages and rents but surprising scientific and engineering talent.  Meanwhile, since the C1 car will go for a million apiece, at a low delivery rate, to those who can pay cash on the counter, financing the company behind it will be easier than in a more consumer-oriented, competitive, high-production rate market segment.

On the other hand though, ~$12 million is NOTHING in auto world.  It’s why I led off with “one step closer,” and not “already there.”  Rimac’s capitalization is around 70-80 million dollars; Tesla by comparison required oh… around half a billion to get going.  And that’s starting with the Tesla Roadster, which was built around the Lotus Elise, which was already converted to electric by other houses.  It took three more years to go from Roadster to the Model S, the company burning up money all the way.  While this one financing round makes Rimac more credible than it was before, that’s still not saying all that much. 

The next question is how further rounds of financing shape up, as well as preproduction cars or other demos.  A styling buck can be churned out in a weekend’s work; a rolling demo piece is much harder but still a long ways from saleable product.  In Rimac’s favor is that, at a limited run of only 88 cars, the company may be able to dodge some or all crashworthiness standards in some markets.  (We know it’ll make emissions standards, duh.)  Some countries have crash-test loopholes for low-rate builders, such as custom rodder houses, and exotics like Rimac.  Still, to be a viable company in the long term, they’ll need some sort of “C2” and/or “C3” products, with higher volume.  Even Ferrari sells 4-8,000 units per year.  Otherwise, the C1 is a boxier Harley-Davidson LiveWire, with no Harley-Davidson Street.

You know, the Harley Street, the motorcycle intended for India, Indonesia, and other developing markets?  It’s telling that of the three new Rimac investors, two are Chinese: China Dynamics, and IAMAL (Integrated Asset Management Asia Limited).  China Dynamics is already involved in other EV projects.  If there’s a saving grace for Rimac, or rather an un-saving grace, it’s that China, Russia, and most third-world countries have crashworthiness standards far below the US, Europe, and Japan.  If you’re not willing (or able) to build a true “world car,” then you can still get a decent run building vehicles for China, Eastern Europe, Brazil and the Latin countries, etc. for a lot less initial investment.  The third investor in this round, already a prior Rimac stakeholder, is Colombian Frank Kanayet Yepes.

It’s no accident that Mate Rimac built an electric bike before putting the supercar in production: China, India, Southeast Asia, etc. buy them by the millions, long before their average consumer buys even a crash-vulnerable car.  If fewer people buy cars at the moment, Rimac has some time to build up an IP base, a factory, a brand, a distribution network etc. while China and India are still developing.  Any future C2 or C3 may then meet them in the middle: a successful, new technology and company, for a new generation of up-and-coming Asian professionals.  Millions and millions of new Asians.  Meanwhile, battery prices keep coming down, while their performance specs keep coming up.

I said it before, I’ll say it again: we can lead, or we will be led.  If we do not produce the world’s next-generation technologies and products, the rest of the world is perfectly willing to cut us off on the road to the future.



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