Aston Martin Lagonda will have to wait a little longer to reach profitability and an electrified future after it revealed it missed its production targets, which were already revised downwards, for 2023.
Lawrence Stroll, the executive chairman of the company and a significant shareholder, said that it was “substantially on track” to achieve its financial goals for 2024.
Aston Martin, which was hit by delays in production of the £185,000 DB12 sport car launched last year, reported 6,620 vehicles delivered to dealers. This was less than the revised target of 6,700, and nearly 5,5% below the 7,000 vehicles it had promised up until November last year.
Aston Martin is delaying its launch of its first battery-electric car due to a lack in consumer demand. The company has reduced its annual losses, but its net debt remains high and its red book continues to grow. The company now plans to launch its battery-electric vehicle in 2026 – a year later than originally planned. It is the latest automaker to delay electrification goals because investment in technology and capacity has been outpaced by consumer demand.
Stroll, 64 said that the consumer demand for battery electric cars, at least in Aston Martin’s price range, was not what they thought two years ago. Stroll said that plug-in hybrids were “much more in demand”, especially from companies like Aston Martin. People “want some electricity but still want the smell, feel, and sound of a sports car”. Aston Martin is set to produce its first hybrid supercar this year, the Valhalla.
Aston Martin’s group revenue grew by 18% to £1.6 billion, thanks to the sales of limited edition, one-off supercars. It reported an operating profit of £305million, excluding tax, interest, and other costs. This is up 61 percent year-on-year.
Since Stroll saved Aston Martin from its disastrous 2018 flotation in 2020, the Canadian billionaire clothing has promised that the company will be profitable by 2024-25 before deductions. This is based on £2 billion sales. The tycoon reaffirmed: “We are on track to achieve our financial targets for 2024-25 in the full year of 2024.”
Doug Lafferty said that Aston Martin expected to reach the £2 billion revenue goal with “high single-digit percentage growth” and an additional 15% increase in average sales prices this year.
Aston Martin’s bottom line loss for 2023 was £239 million , compared to the £495 million it lost in 2022. This brings the total losses over the last four years up to £1.4 billion. Aston Martin’s balance sheet, which has been reconstructed, shows net debt increasing again from £766 to £814 after cash outflows of £360 in the past year.
Aston Martin shares, which had been trading at lows for the past 12 months and have now halved, have increased by 4 percent to 7p each, or 183 1/2p.
The production of cars in Britain has been increasing since the mid-90s. According to the Society of Motor Manufacturers and Traders, nearly 83,000 cars rolled off the assembly lines in January. This represents a 21 percent increase year-over-year.