If there’s one thing that’s almost guaranteed in the world of supercars, it’s some level of corporate instability. Case in point: McLaren Automotive is expected to be sold in its entirety to Abu Dhabi-backed CYVN Holdings. While this should pave the way for McLaren EVs if it goes through, it also could mark the second time in less than a year that McLaren’s road car division has been sold onto new ownership, and a company changing hands so frequently usually isn’t a good sign. So what’s going on here?
Well, it turns out that building race cars and supercars is expensive, and when COVID-19 hit, McLaren was worse off than many other manufacturers. In 2020, CNBC reported that McLaren Group laid off 1,200 workers, or about a quarter of its workforce. As the news outlet wrote, “The redundancies will be made across McLaren’s applied, automotive and racing businesses worldwide. Some support and back office roles will also be affected.”
However, restoring financial balance wasn’t as easy as cutting jobs. From there, divestment intensified. McLaren’s own headquarters, the McLaren Technology Centre, was sold to Global Net Lease in 2021, then leased back. McLaren Applied, the company that builds ECUs for all Formula 1 teams, was sold to Greybull Capital in August 2021.
Back in March, a big shift in ownership structure happened. Mumtalakat, Bahrain’s sovereign wealth fund, moved to increase its stake, to the point of owning all of McLaren Group. At the time, it appeared that this change in ownership was a lifeline for the British brand, but that lifeline was shorter than expected.
While the racing side of the business is still going strong, Autocar reported on Wednesday that Mumtalakat signed a non-binding agreement to divest McLaren Automotive, the road car company, with the intent of selling 100 percent of the firm to Abu Dhabi-backed CYVN Holdings. In a media statement, the firms wrote: “This transformative investment by CYVN Holdings would bring access to additional capital, advanced engineering expertise, and pioneering technology, particularly in the field of electric vehicles.”
See, CYVN Holdings is a major backer of Chinese electric vehicle manufacturer Nio, and while this might seem like an odd pairing to the uninitiated, Nio’s no stranger to speed. It previously built the EP9, a 3,825-pound, 1,341-horsepower, quad-motor electric track-only supercar. Nio’s also a pioneer in battery swapping, a technology that could be applied to make trackdays in electric performance cars easier — just swap in a fresh pack and get back out there. So, Nio seems to have the experience to help McLaren through CYVN Holdings if this sale goes through, but between a slightly stale McLaren lineup and the lead times of new vehicle development, don’t expect immediate change should everything fall into place.
Since its troubles in 2020, the only mainline cars McLaren has launched have been a drop-top version of the Artura, a more hardcore version of the 720S called the 765LT, and an updated 720S replacement called the 750S. Considering that the 12C and its 650S evolution had a combined six-year lifespan, the eight years that the 720S and 750S have been on sale is a damn long time, and no all-new replacement is in sight yet. It can be argued that over the past few years, McLaren has swung from too many new products to not enough new products, especially considering that Ferrari now sells five distinct non-limited-production road cars and Lamborghini cranked out new model variants like crazy before completely updating its supercar lineup over the past few years.
It takes years to develop a new car, and it’s likely McLaren Automotive has some products in the pipeline, as the W1 hypercar probably isn’t the only thing the firm’s been working on. Those future products would likely have to run their course if they’re far enough along, which means it could be years before the brand’s road cars turn a corner, assuming this company sale goes through. By then, the competitive landscape could look very different, as Ferrari is soon set to launch its first battery electric vehicle, Lamborghini now has a fully electrified lineup, and Lotus already has an electric hypercar.
Add it all up, and the 2020s is still looking like a largely precarious decade for McLaren road cars. While a proposed sale could leverage electric vehicle technologies, who knows how long a possible partnership would last, or how long it would take for meaningful changes to appear on the product side? However, if CYVN Holdings leverages its Nio position to advance the development of McLaren EVs, it could give McLaren Automotive the jump-start its been waiting for.
(Photo credits: McLaren, Nio)
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With their recent run of form in F1, it is sad that they may not get the chance to leverage that newfound glory on their excellent road vehicles.
British automotive industry in a nutshell.
My brain isn’t working today, cause I feel that once you can’t make a profit from your core business, then selling said core business to another entity does not magically make you profitable unless someone in the chain wants to lose money.
And, if you were making a profit, why would you sell??
Which begs the question… will they ever make a profit? If not, then how and why would they stay in business??
Hope it turns out well for them. They’re my favorite British-based hypercar brand. The Italians always need some quality competition.