Rimac explains why Bugatti no longer fits into the VW group
What was the financial toll of the chip crisis?
For a component that might be worth $1, we might pay $10 or $20 or $50 – and in some cases even $100 – for a chip just to keep production going. It was a huge challenge. We had to change some designs and some components on the cars just because we couldn’t get the chips and processors.
Is Bugatti profitable? If not, what’s the key to getting there? If it makes money, how do you make it even more successful?
In fact, Bugatti has been very successful and profitable in recent years. The previous CEO [Stephan Winkelmann] did a really good job and left me a good company to continue to build on. So profitability wasn’t really the issue for Volkswagen. The problem was, what’s next? Because if you look at Bugatti, everything is based on the almost two decades old W-16 engine. It’s an amazing powerplant that created the hypercar business. The easiest thing for us would be to take the Nevera and slam a Bugatti logo on it and call it a day. But I was against it. I’m an electric car guy, but a Bugatti should still have an internal combustion engine for some time. But it is being developed to be financially viable. We redesigned everything in Nevera from the ground up. You won’t find a part in this car that you can find in any other car, and we did it on a minimal budget compared to what Volkswagen, for example, put into the Chiron. We will do the same for future Bugattis and create truly exceptional products that are unlike anything else on the market, but without spending billions on them. That’s really the key. In addition, Bugatti is completely sold out until 2025. It’s an incredibly good position.
What drive will the newly developed Bugatti have?
It’s going to be heavily electrified, but we’re going to have a very attractive internal combustion engine. When people see the next-gen Bugatti, they’ll be surprised that I’ve pushed for something like this because people associate me with electric cars. But I’ve always been a performance guy and a car freak. Considering the brand and the customers and the technology available, I think we are developing the best possible solution for Bugatti, which is not an electric car today. It will be one day, but not today.
Rimac is opening a research and development center near Zagreb, which you say will have no fences. What is the underlying message?
Maybe 15 to 20 years ago when you asked an engineer, “What is your dream job?” The engineer would have said: “Works at BMW or Mercedes.” Today I’m not really sure if that’s the case. So the question is: why do you need fences? If you’re building a facility from the ground up, can’t you make it beautiful and still protect the things you need to protect without excluding people? It’s about how you involve the community and the environment. We have kids who ride around here on their little bikes and see how we do things. I would feel terrible if we had to exclude her. We want to be part of the community and also make it the best possible place for employees. You shouldn’t have to announce when a friend or your child is coming over. We’re very open as a company, so we protect the things you need to protect, like: B. A design for a car that will be on the market in five years.
How many supercars has Rimac made since its inception and how will that change with the opening of the new plant, the addition of the Nevera and the addition of Bugatti to the Rimac Group?
When we introduced our first car, the Concept One, at the 2011 Frankfurt Motor Show, we were eight to ten people. We were super small and had very limited financial resources. We built eight of these cars. Now we have entered the second stage with the Nevera. We have just started producing the customers’ cars. There will be 150 of them, or 50 a year. We also build 80 Bugattis a year. The combined volumes of Rimac and Bugatti make it by far the largest player in the hypercar market. We’re talking about hundreds of millions in revenue there.
In addition to manufacturing hypercars, the Rimac Group has developed Rimac Technology for your component business. What is planned there?
When I started the company I wanted to build supercars, but I found that investors don’t really want to invest in it and the revenue will come years and years later because the car takes a long time to develop. How do you survive until then? We started working for other car companies. In those early days we made about 200 batteries for Koenigsegg and 150 for the Aston Martin Valkyrie. Such things. Today we work on projects where we produce batteries by the tens of thousands and ramp them up to hundreds of thousands units a year for a large car company. It’s not just batteries, but also drives, e-axles and infotainment systems.
Rimac has grown from a handful to over 1,000 employees. What’s next?
We’re already noticing that before the first person moves into our new campus [near Zagreb] we will outgrow it. We are already thinking about campus #2 and #3 or creating a megacampus because we are growing so fast. We have a small factory here [near Zagreb] and another five minutes away. We have two other locations for production. We have multiple locations for offices. That’s one of the growing pains of being scattered around. You have no idea how much effort the team and I put into one mold Tetris with all these places. It’s so inefficient.
What is the solution to prepare to grow to 10,000?
One thing I’ve also learned is to avoid making predictions, because when I tell you now that we’re going to have 10,000 employees, that’s a big promise that I have to keep. Circumstances change sometimes. But if you don’t do exactly what you said three years ago, people will trample on you and say you’re a liar. What I can say is that before Christmas I had a company meeting with all the employees and showed them a new plan. I told them, “I know it looks absolutely crazy, but that’s the plan.” And history has shown us that we can achieve our goals.
What were the biggest challenges in building a car industry in Croatia from scratch?
It’s only 12 years, but it feels like several lifetimes. Going from a garage to today with 1,500 employees in several countries was a wild ride. There are no industrial buildings in Croatia. I looked at every building around here – even ridiculous things like the old airport and some old factories that did something completely different. So you have to do everything yourself. They take an old mall and convert it into a factory or build it from scratch. And getting hundreds of chairs or laptops or whatever, that’s the challenge here. Not just because of the pandemic. We’ve always had that problem. It was also difficult to find talent because nobody had any experience with manufacturing, supply chains and so on. It was pretty tough. But I asked myself: Would it have been much easier somewhere else? Probably yes, but maybe we wouldn’t have been there. I think all the struggles and everything we’ve been through had to be exactly how it was for us to be around.
What is the biggest challenge from a business perspective?
I’d say it kept the company alive, whether through fundraising, bank loans, or client projects. That was my focus most of the time. That hasn’t been the biggest problem in recent years because we have big, significant partners. But we’re not over the edge or out of corporate Death Valley yet.