McLaren's 570S Spider preps the path to a hybrid electric future

By Businessweek, June 30 2017

McLaren is rolling out a new convertible sports car, the second vehicle in a record product push designed to yield the funds needed to help the British manufacturer make the jump to electric and hybrid vehicles.

The McLaren 570S Spider, a low-slung two-seater unveiled Thursday at the Goodwood Festival of Speed, is part of a plan for 15 new models and variants by 2022. Buoyed by adding the 570S and 570GT Sport Series line, deliveries nearly doubled to a record 3,286 vehicles last year, boosting pretax profit 70 percent to US$11.9 million.

“The focus going forward will be on successfully delivering these new products and managing continued profitable growth,” Chief Executive Officer Mike Flewitt said. The rise in sales last year showed that “growth plans are both achievable and sustainable.”

The supercar maker is pushing to deliver 4,500 cars a year by 2022, with at least half those cars featuring hybrid powertrains. The investment needed to develop the technology will strain the niche carmaker’s resources.

McLaren spent 20 percent of revenue last year on research and development, including work on an all-electric prototype. That’s more than three times the ratio of the likes of luxury-car giants like BMW.

The transition from conventional combustion engines to electric powertrains is particularly challenging for small companies like McLaren, which lacks a major automotive partner. It’s also a gamble as the brand’s buyers are interested in performance and not efficiency.

That uncertainty has raised questions about McLaren’s future. Last year, talk of a takeover by Chinese investors of parent company McLaren Technology Group fizzled after controlling stakeholders TAG Group and the kingdom of Bahrain’s investment arm ousted chairman and motor-racing icon Ron Dennis. That followed earlier reports about Apple considering a potential investment, which were denied by McLaren.