MILAN -- The Silk Sports Car Company, a joint venture that had hoped to build electrified sports and luxury vehicles in China and Italy, has withdrawn from a plan to build a hypercar in Italy’s Emilia-Romagna region.
The regional government said last week that it had canceled a pledge to contribute 4.5 million euros ($4.8 million) to the project. Local authorities quoted a letter sent by the Silk Sports Car Company, formerly known as Silk-FAW Automotive Group Italy, that it intended to pull out of the agreement.
In an interview with Italian daily Il Sole 24 Ore, Giovanni Lamorte, chief financial officer of Silk Sports Car, said the project “lacked funding because of the war [in Ukraine]” and he promised more news "within a couple of weeks."
Two sources close to the matter told Reuters that Italian prosecutors were investigating the Silk-FAW project.
Tax police visited the offices of Italian procurement agency Invitalia last week to collect documents on an application by Silk-FAW for 38 million euros in public funding to build the plant, in the city of Reggio Emilia, the sources said. The company did not respond to a separate request for comment on the matter via the company's website.
Silk-FAW Automotive Group Italy was controlled by an Irish financial holding of Jonathan Krane, an American investor. According to Krane, the company was a joint venture between his own company, Silk EV, and the Chinese automaker FAW, which is one of the largest in China and builds the flagship Hongqi (Chinese for “red flag”) brand.
In May 2021 Silk-FAW announced it would develop and produce electric and hybrid luxury hypercars in China and in Italy under the Hongqi brand. The Italian plant was to be built in Reggio Emilia, in an area known as Italy's Motor Valley, which is home to brands including Ferrari, Lamborghini, Maserati and Ducati.
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The company hired high-profile executives, including former Ferrari CEO Amedeo Felisa, former BMW and Maserati executive Roberto Fedeli, and former Lamborghini sales executive Paolo Gabrielli. Volkswagen Group's onetime styling chief, Walter de Silva, had a consulting role.
Silk-FAW showed a concept version of the S9 plug-in hybrid hypercar, designed by de Silva, in September 2021 at the Milan Design Week. That concept was similar to one shown by FAW at the 2019 Frankfurt auto show, also called the S9.
Both concept vehicles had the same specifications: A plug-in hybrid powertrain with a V-8 gasoline engine and two electric motors, with a combined output of 1,400 hp, a 0 to 100 kph (0-62 mph) time of 1.9 seconds and a maximum speed of 400 kph (250 mph).
Silk-FAW planned to invest an initial 1 billion euros ($1.2 billion) to develop the S9 and the S7 range (potentially including a coupe, an SUV, and a convertible) as well as building a state-of-the-art production facility and R&D center in Reggio Emilia. Smaller S3 and S5 models were to be built in China but sold globally.
Expectations for 2023
The Emilia-Romagna authorities had promised financial help to consolidate the region’s role as an automotive hub. In 2015 officials there had helped secure Lamborghini’s investment in the assembly of the Urus SUV with a 20 million grant.
Production of the Hongqi S9 was expected to start at the beginning of 2023, but the plan never took off; Silk-FAW did not even sign a contract to buy land for the plant.
Last year many of the top executives left, with both Felisa and Fedeli moving to Aston Martin. COO Katia Bassi, who had a career at Ferrari and Aston Martin, died last November after an illness.
In May 2022 Silk-FAW Automotive Group Italy was renamed Silk Sports Car Company, removing one of the few signs of Chinese participation to the project.
In July 2022 the Emilia-Romagna regional government sought reassurances from Silk-FAW amid worries by the local authorities that the plan had stalled.
At the time, a Silk-FAW board member, Li Chongtian, appeared to confirm FAW's full support of the project. "Silk and FAW are committed to the success of our partnership," he said in a statement, adding that the group was working to ensure that the joint venture had the necessary resources to execute its business plan.
Hongqi in November announced a plan to launch 13 electric vehicles by 2025, but made no mention of the Silk joint venture. Hongqi currently sells one vehicle in Europe, the E-HS9 full-electric SUV, in Sweden, Norway and the Netherlands.
Reuters contributed to this report
