Made in Croatia

Croatian Businessman Mate Rimac Talks Plans with Bloomberg

By 15 April 2021

April the 15th, 2021 - The wildly successful Croatian businessman Mate Rimac is going from strength to strength, and he sat down with Bloomberg to discuss not only his plans going forward but his concerns.

As Novac/Bernard Ivezic writes, reports claim that Rimac Automobili is set to produce a maximum of 100 vehicles per year. After his company announced its highly detailed plans for a new campus, which will include the first car factory in Croatia, Croatian businessman Mate Rimac told Bloomberg that his focus in this segment will remain on small series vehicles.

Bloomberg writes that Rimac has stated that cars with his name on them will always be sold in small quantities - meaning less than 100 units of them per year - to avoid competing with manufacturers who are customers of his company.

It's worth noting that Rimac Automobili's core business isn't actually the production of electric vehicles, but the development and production of components for electric vehicles. The technology of this Croatian company is thus incorporated into the Aston Martin Valkyria and Koenigsegg Reger models.

In addition, Rimac Automobil's largest partner, Volkswagen, has been trying to consolidate Bugatti through this particular Croatian company for a long time. After Croatian businessman Mate Rimac rejected the possibility of transferring the majority ownership of Rimac Automobili to Volkswagen or Porsche, in exchange for Bugatti, the Germans presented a new plan.

Bloomberg recalls that back in March, Herbert Diess, the CEO of Volkswagen, proposed that Porsche enter into a joint venture with Rimac and thus take over Bugatti.

As such, Volkswagen, or Porsche, would de facto give up most of its ownership of Bugatti only if the well-known French manufacturer of internal combustion engines took over and modernised the most successful European manufacturer of technology for electric vehicles. Rimac Automobili thus found itself in a somewhat unenviable position, because Porsche is, after Rimac, individually the largest co-owner of Rimac Automobili and a company that raised its market valuation to the status of close to 1 billion US dollars.

Bloomberg also reports that, although Croatian businessman Mate Rimac has already stated once that he is not inclined to go public through the SPAC, he is still, at least theoretically, thinking about it.

''It wouldn't be a good feeling for me, that while everyone is collecting heaps of money in this way and may not have as many things to show for it, in the same way as we do, that we're left behind without capital, so of course we're still looking into this possibility,'' explained Mate Rimac.

SPAC is when company is created and has the obligation to take over another company and de facto sells the shares of that other company through itself. Rimac told Bloomberg that he has a high opinion of companies like Lucida or the company Rivian Automotive in which Amazon has invested, but also that he is suspicious of how much SPAC can be used by other startups for electromobility.

Late last year, Mate Rimac told the Financial Times (FT) that frequent use of SPACs could harm the long-term prospects of the industry in which it operates.

''The managers of such specialised companies (SPAC) don't bear the same responsibility for the potential growth prospects of the company as managers who raise money through an initial public offering (IPO) in stock markets do, which raises fears,'' said Mate Rimac. He explained that a lot of money can be obtained today for companies that don't have any product to speak of and that it scares him.

''When we list shares on the stock exchange, I want to show the numbers, I want the shares to be traded on the basis of facts,'' Rimac told the Financial Times at the time.

Now for Bloomberg, he pointed out that no other company in the field of electromobility can boast of making a profit for five years. Back in 2019, Rimac Automobili had revenues of €23 million and a profit of €1.4 million in total.

For 2020, Rimac Automobili pointed out that they have achieved strong growth and that they expect even stronger expansion this year. However, the result for 2020 has not been revised yet, so it hasn't been made public yet either.

For more on Croatian businessman Mate Rimac and other local entrepreneurs and their products, make sure to check out our dedicated section.