Silk-FAW May Not invest In Italy For Electric Sports Car Project

Italy's Emilia-Romagna regional government will hold talks with Silk-FAW next week over fears the Sino-U.S. venture's plans to invest a billion euros to produce electric sports cars in the area might not go ahead.

Silk-FAW, a start-up between U.S. automotive engineering and design firm Silk EV and Chinese automaker 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 a production facility and a research centre, 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 significant progress, with the company citing problems with finalising a mortgage contract to buy land for the plant.

Vincenzo Colla, head of economic development in the Emilia Romagna regional government, told Reuters he had set up a call with Silk-FAW executives for July 14 to assess the plan and whether the company had enough funding to proceed with promised investments a year after they were publicly announced.

"They'll have to tell us if the project goes ahead ... and, if it does, it necessarily means that financial resources are there. If the project is dead, they just have to tell us," Colla said. "We're clearly worried."

"As of today financial flows have not been up to the needs," Colla said. "We expect to see a financial roadmap to make this investment sustainable."

Silk-FAW - which operates through an Italian company owned by another based in Ireland - is 85% owned by its chairman, Silk EV founder Jonathan Krane, and 15% by FAW. The Italian company currently employs 75 people.

It has not publicly disclosed financial data nor details about funding as yet.

Managing Director Katia Bassi told Reuters on Wednesday that Silk-FAW would provide clarifications next week on a wide range of issues, including financial ones.

She declined to give further details, adding that despite a delay on the land purchase the company had continued to develop the two models it wants to produce in Italy, the S9 hybrid hypercar and the S7 electric sports car.

Bassi said Silk-FAW was working to raise the sum of more than 1 billion euros ($1 billion) for the plan.

"That's the amount needed for this project, that's a fact, clearly we cannot go back on this or do it with less," she said.

Asked whether Silk-FAW would eventually start building cars in Italy, she replied "this is our goal".

She said the Italian operating company was still in the process of approving its balance sheet for 2021.