British firm to gain access to Mercedes technologies including electric and hybrid powertrains under expanded agreement
Mercedes-Benz will take a major stake in Aston Martin as part of a “truly game-changing” strategic technology agreement that will underpin a plan for the British firm to double its sales by 2025.
The agreement expands the existing relationship between the two firms, and will include Aston Martin gaining access to Mercedes technology - including electric and hybrid powertrains - that will form a key part of its expansion plans.
In a release, Aston said the deal included "powertrain architecture (for conventional, hybrid, and electric vehicles) and future oriented electric/electronic architecture, for all product launches through to 2027."
While the firm declined to outline exactly what products were planned under the new agreement, new Aston Martin CEO Tobias Moers said that the first Aston vehicles utilising technology from the deal would be launched late next year. He said that "it needs a little time to get the technology in different products" but added there would be "a kind of product firework in 2023".
With the new agreement in place, Aston Martin has targeted selling around 10,000 vehicles a year by 2025, and is aiming for revenues of around £2 billion and EBITDA profits of around £500 million. For comparison, the marque sold 5,862 vehicles in 2019.
Lawrence Stroll, whose investment consortium completed its takeover of Aston Martin earlier this year, said that the 10,000 sales would be comprised of front- and mid-engined sports cars and "a portfolio of SUV products", hinting of new models joining the recently launched DBX. Around 20-30% of Aston's sales by 2024 will be hybrid models. Stroll said the firm didn't plan to launch a full EV until 2025.
Under the agreement, in return for the technology Mercedes-Benz will gradually increase its stake in Aston Martin up to a maximum of 20%, providing a welcome boost in investment for Aston and making the German giant one of Aston’s largest shareholders. The technology will be supplied "on commercial terms". Mercedes previously owned around 2.3% of Aston Martin shares as part of a deal that involved its AMG performance arm developing a bespoke V8 for Aston.
Lawrence Stroll, whose investment consortium completed its takeover of Aston Martin earlier this year, called the agreement “a transformational moment”. He added: “Through this new expanded agreement, we secure access to world-class technologies to support our long-term product expansion plans, including electric and hybrid powertrains, and this partnership underpins our confidence in the future.
“This is truly game changing. We now have the right team, partner, plan and funding in place to transform the company to be one of the greatest luxury car brands in the world.”
Moers, who joined the firm from his previous role as head of the Mercedes-AMG performance division, said: “We have updated our plans for the business, incorporating the benefits of our enhanced partnership we are announcing today. We are targeting delivery of significant growth and margin expansion in the medium-term, not just through product expansion but also by incorporating a strategy to deliver a level of operational excellence and efficiency throughout every aspect of the organisation.
“The capabilities of Mercedes-Benz AG technology will be fundamental to ensure our future products remain competitive and will allow us to invest efficiently in the areas that truly differentiate our products.”
While the deal will give Aston Martin access to Mercedes-Benz powertrains and technologies, these will be installed in Aston-built vehicles, which will continue to utilise the British firm's platforms and technology in other areas. Stroll insisted the firm would continue to produce all its own vehicles at its Gaydon and St Athan plants.
Mercedes-Benz product strategy chief Wolf-Dieter Kurz said: "With this new expanded partnership, we will be able to provide Aston Martin with access to new cutting-edge powertrain and software technologies and components, including next generation hybrid and electric drive systems. Access to this technology and these components will be provided in exchange for new shares in Aston Martin."
Aston has launched the DBX SUV this year, which will play a major role in growing sales in the future. The new deal is a huge boost to Aston Martin's future plans, giving it access to proven electric vehicle technology without the need to develop its own EV systems. Since taking over, Stroll has already suspended plans to relaunch the Lagonda brand as a range of luxury EVs.
Moers said the plan for Lagonda to become Aston's EV flagship had been abandoned – but hinted that there was still a future for the historic nameplate: "Lagonda is not any more the brand for electric cars. Lagonda has a different purpose for the future. Electric cars are supposed to be an Aston Martin."
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