©Reuters. FILE PHOTO: An Aston Martin Valkyrie sports car is seen at the Auto Zurich Car Show 2022 in Zurich, Switzerland, November 10, 2022. REUTERS/Arnd Wiegmann/File Photo
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By Yadarisa Shabong
(Reuters) -Aston Martin is delaying the launch of its first electric car due to a lack of consumer demand, it said on Wednesday, as record prices for its luxury and special edition models helped the British carmaker to reduce annual losses.
Aston Martin is now aiming to launch its battery electric vehicle (BEV) in 2026, a year later than expected, becoming the latest automaker to push back electrification targets as investment in capacity and technology outpaces demand for electric vehicles.
“Consumer demand (for BEVs), certainly at Aston Martin pricing, is not what we thought it would be two years ago,” executive chairman Lawrence Stroll told reporters.
Stroll said there is “a lot more demand” for plug-in hybrid vehicles, especially for a company like Aston Martin, as people “want some electrification… but (to) still have the smell, feel and sound of sports cars.”
Aston Martin’s first hybrid supercar, Valhalla, will go into production this year.
The company’s annual pre-tax losses more than halved in 2023, falling short of market expectations, after selling prices hit record highs as Valkyrie models and other special edition cars were delivered.
Mercedes-Benz (OTC:) earlier this month delayed its electrification goal by five years and assured investors that it would continue to improve its combustion engine models.
Last June, Aston Martin signed a supply deal with Saudi Arabia-backed Lucid Group (NASDAQ) to bolster its electrification strategy.
Stroll, who downplayed concerns about competition from Chinese electric vehicle maker BYD (SZ:), added that he was satisfied with the battery technology and platforms available to the company.
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Aston Martin, the favorite car brand of fictional secret agent James Bond, has fallen on hard times since its market debut in 2018.
However, major shareholder Stroll has sought to strengthen its liquidity and margins by launching next-generation sports cars, the latest of which was the new Vantage sports model unveiled this month.
At 10.47 GMT the carmaker’s shares fell 2% as investors worried about cash flow and volumes.
Aston Martin hoped to turn free cash flow positive in the fourth quarter but was hit by the delivery times of its DB12 and Valor models.
Positive cash generation is now expected in the second half of this year.
“Aston Martin is pouring huge amounts of money into marketing in an attempt to position itself at the ultra-luxury end of the spectrum. This pivot was never going to be cheap,” said Hargreaves analyst Sophie Lund-Yates.
Aston Martin reported an adjusted pre-tax loss of £171.8 million ($217.4 million) for the year ended December 31, compared with a loss of £451 million a year earlier.
Analysts on average expected a loss of £209 million, according to a consensus compiled by the company.
The company kept its short and medium term forecasts unchanged.
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