Silk-FAW confirms plan to build electric sports cars in Italy

MILAN -- Silk-FAW, a start-up of U.S. automotive engineering and design firm Silk EV and Chinese automaker FAW, said it would press ahead with a plan, worth over one billion euros ($1.02 billion), to build electrified cars in Italy.

Silk-FAW will finalize the purchase of the land in the city of Reggio Emilia where the production site will be built starting Aug. 5, it said in a statement on Monday after attending a videoconference with local authorities.

Silk-FAW said it would hold the opening ceremony for the construction of the site, which will also include the company's headquarters and a research center, in early September.

Earlier this month Italy's Emilia-Romagna regional government sought reassurances from Silk-FAW amid worries by the local authorities that the plan might not go ahead.

Silk-FAW board member Li Chongtian confirmed FAW's full support to the project.

"Silk and FAW are committed to the success of our partnership," he said in the statement, adding the group was working to ensure the joint venture had the necessary resources to execute its business plan.

Chongtian is head of FAW Capital Holding, the unit in charge of FAW's external investments.

Silk-FAW plans to develop and produce electric and hybrid luxury hypercars in China and in Italy under the Hongqi brand.

Last year it picked the city of Reggio Emilia to build its facility, in an area known as Italy's "Motor Valley," which is home to brands including Ferrari , Lamborghini, Maserati and Ducati.

Production was expected to start at the beginning of 2023 but the plan has yet to make progress, with the company citing problems with the mortgage needed to buy land for the plant.

The Emilia-Romagna regional government and the city of Reggio Emilia said in a separate statement that Monday's videoconference was "necessary and important" but added they were still waiting to receive minutes of the meeting signed by Silk-FAW executives confirming their commitments.