Bentley CEO details $3.4 billion 'transformation' for electric vehicle era

Bentley Motors CEO Adrian Hallmark joins Yahoo Finance Live to discuss Bentley's push to make electric vehicles.

Video Transcript

KARINA CONTRERAS: Welcome back. Well, ultra-luxury British automaker Bentley just announced plans to invest more than $3 billion over the next decade to become a fully electric vehicle brand. Yahoo Finance's Pras Subramanian just spoke with Bentley's CEO Adrian Hallmark earlier today about that plan. And Pras joins us now. Pras, fully EV by 2030. That is an ambitious goal.

PRAS SUBRAMANIAN: Yeah, it is, Karina, for a very storied brand like Bentley. They're going to invest 3 and 1/2 billion, like you said, into their factory and crew, England, to build these EVs, the first of which that will come out in 2025. Earlier, I spoke to CEO Adrian Hallmark about that and about the brand's transformation into that EV future. Let's take a listen.

ADRIAN HALLMARK: First of all, the announcement that we will build the first of our new BEV family here and crew is that the news for colleagues. And that's really important because it's not just about the first car. It's about transforming the factory to be able to build subsequent battery electric vehicles.

So the 2 and 1/2 billion investment that we've committed is for both transformation of this 75-year-old site as well as full transformation of five products over five years from combustion engine towards a full battery electric vehicle. It's probably the most bold, radical plan that the company has ever had since the company was started.

PRAS SUBRAMANIAN: I know many of the workers there and the team at crew are very excited about this transformation. You also mentioned that the new EV will be built there starting in 2025. What can you tell us about that vehicle? And will it be based on that stunning EXP 100 GT concept we saw a couple of years back?

ADRIAN HALLMARK: So I can't give too much information away about the car yet for competitive reasons. What I can say, though, is the following. We aim to create a product that is first and foremost a Bentley. It's strong. It's proud. It's thoroughbred. It covers long distances in refinement and comfort, and it's fast. That's the essence of the Bentley brand.

And, of course, the craftsmanship and inspiration you get when you see our products will be built into those new family of battery electric vehicles together with even more digital content than we've ever had before. So it will be another step change in our craftsmanship technology and performance just like we've delivered with the current range of cars.

As far as what it will look like and what it will-- where it will fit in the marketplace, I can't comment yet on the body style, the number of doors, the ride height, the width or the whole description of the car. That's competitive, and we'll do that a bit closer to the launch. But believe me, it's a game changer. It's exciting, and it's a real Bentley.

PRAS SUBRAMANIAN: So talking about real Bentleys, what are your clients telling you about EVs? Do they want their Flying Spur sedans and their Bentayga SUVs to be all electric? Do you think the current order book is affected at all by EV demand?

ADRIAN HALLMARK: It's interesting. It is because we started the year in the best position in 2021-- best position we'd ever been in as a company in terms of forward orders. When we started 2022, we were some 30% higher orders than we started the year with.

Now, it's a lot of math, but if you think we grew 31% last year, but we know the bank also grew by another 30%, it means that whatever we've said about sustainability has resonated. It definitely hasn't damaged the current demand and a current performance. And a good indicator is the only car that we had available with electrified powertrains in 2021 was the Bentayga hybrid. And that went from zero in the year to 20% of the Bentayga mix without any push.

So this year, we've launched the Flying Spur Hybrid. And we're confident that the mix will be similar. And finally four years ago, we looked at research in our customer world, both existing buyers, but also people that buy other luxury vehicles of the same price bracket. And around 30% of people four years ago in our segment said that they were thinking of an electric car in the next five years.

That figure has now doubled to more than 60% of luxury buyers and intenders wanting to seek an electric car in the next five years. So we think the timing of '25 for the first and to fully convert to battery electric by 2030, we think we've caught the inflection point. We've caught the technology wave. And we've certainly responded slightly in advance of customer demands, but they're coming with us.

PRAS SUBRAMANIAN: You know, we talk about this green tidal wave for EV not just from the demand from customers, but also from automakers like Bentley and others. You guys are committed to an EV future-- fully EV future by 2030. And so is your rival, Rolls-Royce. What do you think sets Bentley apart from them and other and the high-end space where Aston operates and so does-- so will Ferrari soon?

ADRIAN HALLMARK: It's quite interesting because there is six pure luxury players out there. There's other companies do cars that are more expensive than their base cars. But if you look at the six luxury players in the world, four of them are based in the UK and two are based in Italy-- Lamborghini, Ferrari, Aston, Rolls, McLaren, and Bentley. And the interesting thing is that our differentiation compared with any other mix of two of those is probably the strongest.

You know, we're not a high-performance car company with loud exhaust systems. We're not a pure luxury business in the super luxury segment. Our customers drive our cars pretty much every day of the week. It's everyday quality and excellence that they seek. And Bentley as a brand is slightly more understated than some of our more extroverted competitors. And that works for us.

And I think when you combine that with a level of quality that we achieve-- and I don't just mean aesthetic quality, but I mean function of quality in the market, which is on par with the best of the premium brands, which is rare for a luxury car company-- I think we're a unique proposition. And electrification fits perfectly with what Bentley stands for-- effortless acceleration, long distance touring capability, silence when you want it, and fun when you need it.

PRAS SUBRAMANIAN: You know, I was surprised at how fast Bentley's current and prospective customers are looking to switch to EV. To me, that was a big kind of headline right there. So I guess for Bentley, it was the right time to do this changeover. Guys.

- You know, Pras, great interview-- good insights there from him. But I know the average age of a Bentley buyer is like, 53. And I imagine, or he sounds pretty confident that those high-end buyers are ready to fully embrace EV.

PRAS SUBRAMANIAN: Yeah, I mean, look, [INAUDIBLE] look forward to tonight when Tesla reports and how they've changed the game in terms of what's acceptable for driving a car of engine powered by gas or by electric. I'm not surprised that they're seeing this change from their clients. Oh, I'm surprised at how many want to do right away.

But we talked to Rolls-Royce's CEO a few weeks ago. And he said that not only is it customers wanting electric cars, it's actually younger customers that want that. The younger customers are spending a lot of money on their vehicles even to the tune of upwards of hundreds of thousands of dollars, even $1 million for certain cars that Bentley offers.

- Wow. They pay big for them. And then, of course, you have to maintain them. And it's not cheap. Pras Subramanian, thanks so much.