Bentley thinks COVID-19 is driving automakers to adopt electrification quicker

Bentley CEO, Adrian Hallmark, spoke at the SMMT summit today, and the big takeaway from his talk is that the company is focusing on electrification more than ever as it continues to cut costs and focus on becoming “a sector defining, financially independent, and recession proof business.” This focus, however, will bring the death of gas-powered electric vehicles and a cut in workforce at a time when people need work the most. Is it justified, though?

Bentley’s Rocky Past And Returning to Profitability

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Bentley had it rough for a while, only returning to profitability for the 2019 model year. The company never published its full 2020 profit numbers, but according to Automotive News, the company was sitting on an operating profit of 65 Million Euro or about $73 million at the end of September 2019. At that time, the company predicted a profitable 2019 and a record-setting 2020.

Of course, that record-setting 2020 was predicted before the COVID-19 pandemic sent the world into a tailspin, with auto sales plummeting like money suddenly didn’t exist. During the pandemic, Bentley shut down operations along with most other automakers, but Bentley closed down early and restarted production early (it’s running at 50-percent capacity as of the time of this writing) and is looking to increase production in the very near future.

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” In closing down for Covid-19, we predicted three months without any revenue and prepared for that, and we won’t be far off that. We closed down early and restarted early. Within three to four weeks, we should be up to 100% production. Today it’s just 50% of normal capacity.”

However, that’s not the end of the story, and where Bentley’s financial situation sits right now is unknown outside of the bowels of the company.

Bentley’s Focus on Electrification and Cost Cutting Initiative

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For a company that was struggling to stand on its own two feet, it’s understandable that it would be worried about falling into the red zone again. However, some could argue that the company is worried more about growing profits than the people that make those profits possible. Before we get too far into that, however, let’s talk about how Bentley’s Adrian Hallmark believes that the COVID-19 pandemic will push automakers to adopt electrification faster. According to him, it’s more feasible to focus on battery technology – technology of the future – that to focus on delivering horsepower and advancing fuel-power drivetrains.

” All of our plug-in hybrids and electric vehicles are full steam ahead. We and the industry may see this as a natural accelerator to green technologies. If you have to prioritise, where do you place your bets? More horsepower or more cell technology? The obvious answer is the latter.”

After admitting that the company’s monthly costs are around £88 million, nearly $110 million at current exchange rates, Hallmark admitted that people costs aren’t the biggest cost driver for the Bentley. He went on to say that the company has a bold future beyond the latest crisis.

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” We see it as a turning point, not as an end point. We can see a bold future beyond this crisis. We believe electrification and making business and drivetrain sustainable is both desirable and possible.”

And, while this makes sense, the company is also making other moves, and that includes cutting jobs when people need them the most. Bentley’s latest initiative, known only as Beyond 100, includes a reduction of 25-percent of its workforce. According to Autocar, the company reached out to all 4,200 of its contracted employees with a voluntary release package offering based on a number of factors, in hopes that 1,000 of them would bite and choose to leave the company. It’s nice to make it voluntary, but we all know it only remains voluntary if the company sees the results it expects.

Bentley EXP 100 GT Concept specifications
Engine Next Generation Traction Drive
Horsepower 816-1,360 HP
Torque 1,500 Nm (1,106 lb-ft)
Range 700 km (435 miles)
0 to 60 mph 2.5 seconds
Top Speed 300 kph (186 mph)

What it All Means – Looking Forward

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The jobs cuts and electrification push are just a small part of the initiative that includes an entire business restructuring that Hallmark hopes will turn the company into that “sector defining, financially independent, and recession proof business.” I mentioned earlier. Yet, there’s more beyond the electrification push and job cuts:

” We’ve fully committed to electrifying our business as fast as we can. We’ve made our factory sustainable, next will be our product range and then our supply chain.”
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So, what does all this really boil down to?

In my opinion, automakers like Bentley – all of them really – are too quick to cut their workforce, and it makes it clear that none of them care about the employees that keep them running in the first place. Eventually, Bentley will probably grow its work force once again, but the company as a whole is going to change forever. It won’t be long until Bentley is a rich man’s Tesla, and I’m honestly curious to see if the demographic that keeps Bentley alive is willing to make a full transition to electric vehicles. I have to commend Hallmark’s drive and desire to keep the company alive and profitable amid crisis as it moves into the future, but as far as using the pandemic as an excuse to push into electrification, I see it as an overly bold move that could be catastrophic for the company if things don’t go according to plan.

Robert Moore
Editor-in-Chief and Automotive Expert - robert@topsped.com
Robert has been an auto enthusiast his entire life. He started working cars at a young age, learning the basics from his father in the home garage on the weekends. As time went on, Robert became more and more interested in cars and convinced his father to teach him how to drive when he was just 13 years old. Robert continued working on cars in his free time and learned as much as he could about engines, transmissions, and car electrical systems, something that only fed his curiosity more and eventually led him to earn a bachelors degree in automotive technology with a primary focus on engine performance and transmission rebuilding.  Read More
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