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Car Company, a joint venture that had hoped to build electrified sports and luxury vehicles in China and Italy, has withdrawn from a plan to build a hypercar in Italy’s Emilia-Romagna region.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.
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.