Silk-FAW’s Italian plant is not happening. The Emilia-Romagna region – home of Italy’s Motor Valley, the cradle of its most prestigious automaker brands – slammed the brakes on the Sino-American joint venture that aimed to produce electric hypercars there.
- Through an executive decision, the regional government “tore up” the agreement for the construction of Silk-FAW’s massive plant.
- It also revoked the €4.5 million contribution it had assigned to the company, which was linked to a never-fulfilled €11 million investment on behalf of Silk-FAW.
Inconsistent plans. As reported by Ansa, the decision – laid out in the document – hinges on Silk-FAW’s own “willingness to renounce the settlement and development agreement signed on 27 April 2022.” Which, as noted by the regional government, effectively sanctioned its invalidity.
- Despite its bombastic promises dating back to 2021 – featuring “a total investment of €1 billion and 5,000 employees to be hired” to develop the prototypes of the first Hongqi S racing cars – the company never even purchased the land it had selected to build its factory.
- Several top managers (such as former Ferrari execs Amedeo Felisa and Roberto Fedeli) jumped ship months ago, undermining the credibility of the project, and many employees have resigned, demanding that the company, which is now paying outstanding salaries and fifteen injunctions, be put in default.
What’s next. Silk-FAW will still be able – if it so wishes – to appeal within the terms of the law against Emilia-Romagna’s measures. Nonetheless, it’s highly unlikely for the joint venture to relaunch against those same institutions that had welcomed the project in 2021: faced with continuous postponements and lack of concreteness, despite meetings and video conferences with Chinese government delegations to seek solutions and follow up on promises, trust has been broken.