The need to focus spend post-Covid-19 means combustion engines could disappear sooner
The need to prioritise spending following the Covid-19 pandemic will drive car makers more quickly into electrification, according to Bentley CEO Adrian Hallmark.
Talking at the SMMT summit, he said: “We have had to ruthlessly prioritise our spend. We’ve had to pull levers to control costs. Whatever we’ve done has been on the combustion engine. We have delayed or deleted certain derivatives.
“All of our plug-in hybrids and electric vehicles are full steam ahead. We and the industry may see this as a natural accelerator to green technologies. If you have to prioritise, where do you place your bets? More horsepower or more cell technology? The obvious answer is the latter.”
Bentley has recently announced that it will cut almost a quarter of its workforce as it looks to restructure its entire business under an initiative called Beyond 100. The plan is intended to make Bentley “a sector-defining, financially independent and recession-proof business”.
Hallmark said that there have been three crises since he joined Bentley at the beginning of 2018: “The first was internally driven, because we weren’t sufficiently prepared for WLTP regulations. The second was preparation for a hard Brexit and the third is now Covid-19.
“The first message is that the crises can be expected – although hopefully not this frequently. The key to success is both flexibility: we have to be innovative and face up to new realities.
“Secondly, cash. In closing down for Covid-19, we predicted three months without any revenue and prepared for that, and we won’t be far off that. We closed down early and restarted early. Within three to four weeks, we should be up to 100% production. Today it’s just 50% of normal capacity.”
Hallmark revealed that Bentley’s monthly costs are AUD$159 million. He described the government’s furlough scheme as “inspired” but said that people costs aren’t the biggest cost-driver for Bentley.
Talking about the future after Covid-19, Hallmark said: “We see it as a turning point, not as an end point. We can see a bold future beyond this crisis. We believe electrification and making business and drivetrain sustainable is both desirable and possible.
“We’ve fully committed to electrifying our business as fast as we can. We’ve made our factory sustainable, next will be our product range and then our supply chain.”