Sir Jim Ratcliffe’s drive to make a rival to the Land Rover Defender has racked up steep losses amid difficulty sourcing parts because of global supply chain disruption.
Pre-tax losses at Ineos Automotive, a subsidiary of the billionaire’s chemicals conglomerate, doubled to €212m (£186m) last year, accounts filed with Companies House show. It has run up total losses of €506m since its inception in 2017, and last year received a loan of €944m from its parent company, on top of €471m in 2020. It plans to repay the loan from future revenues from the off-road vehicle.
Ratcliffe, one of Britain’s richest people, is building a 4x4 vehicle – called the Grenadier after his favourite London pub – which the firm says will combine “rugged British spirit with German engineering rigour”. Try-out vehicles are being made and tested at a factory acquired from Mercedes-Benz in Hambach in eastern France, and debuted at the Goodwood Festival of Speed in Sussex last year. Ineos launched a full digital brochure in April, and has been taking sales orders and deposits since mid-May, with plans to start production later this year.
Nevertheless, the launch date – initially planned for early 2022 – has slipped repeatedly amid trouble sourcing some parts because of the Covid-19 pandemic and disruption to global trade.
“The company’s directors and senior management team have stayed informed of the supply conditions to understand the key concerns and [are] reviewing options to overcome potential delays,” it said in the accounts.
Higher prices for raw materials and electronic components in particular threaten to push up the company’s costs, and it flagged that it was not actively hedging against the risk of rising prices of electronic components of raw materials.
Ratcliffe, among the most prominent business backers of Brexit, had planned to build the car in Bridgend, south Wales but dashed hopes of an automotive revival there by opting for a smart-car factory in Hambach near the Franco-German border instead.
The off-roader, which costs from £49,000, will initially use an internal combustion engine but Ineos is also looking at hydrogen fuel cell technology that it could eventually also use to power vans and construction equipment. It received £124,000 from the UK government in 2019-20 for a feasibility study of hydrogen fuel cells, which produce no exhaust emissions other than water, and has struck a deal with Hyundai to use the South Korean carmaker’s technology.
Ratcliffe has a personal fortune of more than £6bn, according to the Sunday Times; including his business interests, he is thought to be worth £13bn. He moved to Monaco in 2020 for tax purposes despite being a vocal supporter of Brexit.
In August, the billionaire, who is from Greater Manchester, declared an interest in buying Manchester United from the club’s beleaguered owners, the Glazer family. He had previously wanted to purchase Chelsea from Roman Abramovich.
Ineos could not be reached for comment.