Q&A: Rolls-Royce CEO Torsten Müller-Ötvös
The future of Rolls-Royce as it transitions to electric vehicles and the changing nature of luxury.
THE DETROIT BUREAU | June 29, 2023
Calistoga, Calif. | With the introduction of the 2024 Rolls-Royce Spectre, the company is launching its transformation into a pure electric vehicle brand, a conversion the company expects to complete by 2031.
It’s a journey that started in 2011, when Rolls-Royce revealed its first electric vehicle in the form of the 102EX, a plug-in version of the Phantom sedan, at the Geneva Motor Show. It used a 71-kilowatt-hour battery pack and two electric motors to produce 388 horsepower, rather than the vehicle’s V-12 gas engine.
But with the launch of the 2024 Rolls-Royce Spectre, the automaker is offering its first luxury EV, one that will change the course of the boutique luxury automaker.
We had the chance to sit down and talk with Rolls-Royce CEO Torsten Müller-Ötvös about the transition and what it means earlier this week. The interview that follows has been edited for length and clarity.
Rolls-Royce CEO Torsten Müller-Ötvös in the company’s Dubai office.
Larry Printz: “When you introduced your first electric vehicle concept, the 102EX, there seemed to be a bit of pushback from your customers. Given that Rolls-Royce is such a traditional brand, and heritage is so important, is there still reluctance from your customers to go electric?”
CEO Torsten Müller-Ötvös: “The pushback was not so much about it’s an electric car. The pushback was at times about the range not being sufficient at 100 miles, if at all, and charging times that took nearly eight hours until that battery would have been recharged. So the technology was definitely not at levels where anybody would have said, ‘build me one.’ It wasn’t a philosophical objection. It was even the contrary, and many of the clients we allowed to drive the car were positively flabbergasted at how similar it behaved to a normal 12 cylinder, and even better because the torque was so great. But all the rest was not great.”
LP: “So this was really a case where customers were used to technology being top notch for them to even consider it.”
TMO: “Yeah, I think it is more about that they aren’t accepting any compromises, and they would never. A Rolls-Royce is said to be perfect and needs to be perfect in every little detail. And they don’t want to see us experimenting with things which are not yet at levels that are easy to use or comfortable to use. That’s also the reason why we don’t have autonomous driving. As long as autonomous drive is not really at levels where it is effortless for our clients and brings benefit we wouldn’t do it.
“And the reason is that in many, many, many cases, the Rolls-Royce is never the number one car in the household. They have many other cars, all sorts of cars for all purposes. So that’s also the reason why they will not accept any compromise in a way that makes them feel to be guinea pigs with new technology in a Rolls Royce. We clearly observe and watch what’s going on. It’s a great advantage to be part of the BMW Group because we have access to latest, greatest technology. And when the battery technology and charging got to a level where we would be satisfied, then we thought that’s it, let’s do it.”
Purely battery electric
2024 Rolls-Royce Spectre
LP: “And this is why we have not seen a fuel cell in a Rolls-Royce.”
TMO: “No, the fuel cell Rolls-Royce is nothing that is currently in any way on our list to be developed. You know that the BMW Group is investing quite some money into it. Rightly so in a way of having all alternatives around and the EX5, which is currently under development, and it’s also running in a small little fleet gives quite some interesting insights. And I think it’s a different way to generate the electricity for the motors. And so I wouldn’t rule it out, but it’s nothing that we currently, in any way, are looking into. We are fully concentrated to roll out electrification with batteries. So all the cars you’re gonna see over the years to come until 2030 will have batteries and electric motors.”
LP: “And the same holds true for synthetic fuels, which I know is being investigated by some automakers as well.”
TMO: ”Yeah, I mean, when the day comes and synthetic fuels are available, our engines will then be capable of running on synthetic fuels. But that was never an option for us that this might allow us to skip electrification. Not at all. And so it might be a nice alternative for those who are running on combustion engines even in 30 or 40 years. But all of our 12 cylinders can be operated in the next 10, 15, 20 or 30 years. Nobody needs to be worried that there won’t’ be fuel any more around.”
LP: “I’m still surprised that you’re not getting any pushback from customers regarding electrification as Rolls-Royce is a brand was such heritage that was brought along for so long.”
TMO: “There’s been no resistance to electrification, not at all. Even the contrary; we have extremely forward-thinking clients. We have brought the average age down and we have a lot of very young clients and they are not at all in any way traditional. I would even say be careful when you are too focused on your own tradition. You might die one day because you are too worried to move the brand on. And we have moved the brand on with some radical stuff like Black Badge, and doing more funky things that was seen in the beginning as, ‘Oh man, what are you doing here?’ But it never spooked our more traditional clients; not at all. I think they even like it that we are keeping the brand so highly relevant with very modern target groups. Nobody wants to be aligned with an old-fashioned brand. That’s the last thing you want to have in your life.
Attracting new buyers
C.S. Rolls in an 1898 Columbia Electric.
LP: “That’s what happened prior to BMW acquiring Rolls Royce.”
TMO: “It was not so much old-fashioned. It was more the complete lack of investment in new technology, lack of investment in quality or lack of investment in whatever. And in Britain, it was clearly stated at that time that it was seen as national embarrassment in a way of this is not any longer what it should be. And I’m pretty sure that the founding fathers were turning in their graves at these times. I’m also pretty sure that now they are sleeping far better.
LP: “What do you credit with bringing the average age of your buyer down? Was it Black Badge?”
TMO: “No, it was many things (but) Ghost helped; it was already launched when I joined in 2010. And then came three years later Wraith, which helped a lot, a fastback coupe clearly designed and targeted for the self-driver, then Dawn brought back the romanticism. And Black Badge helped obviously and then Cullinan made the brand casual, approachable, easy.
LP: “You have a couple of different sizes of sedans or cars in your line-up. Any thought given the success of Cullinan and it’s your top seller? Will we see another size SUV coming from you?”
TMO: “No, there are no plans. There will be a Cullinan successor one day, obviously electric. We are pretty happy with the line-up we do have. It is size wise, right. Scaling down body size doesn’t really bring a lot of additional potential in the market. You end up in cannibalizing yourself and that is not what we want to do. We want to have clearly positioned, well-separated products. And we never chase volume. I’m not interested in whether we do 6,000 or 5,000. That’s never the issue and I never talk about volume. What I’m interested in is profit. I get a target every year and I know my targets already for the upcoming years, because we have it in our long-range planning and then I need to find ways and means to make that happen.”
LP: “And customers have to wait to get their cars.”
TMO: “Yeah, of course. Bespoke is a nice lever for profitability and profit. Obviously, bespoke is probably something we’ve invented and broadened in such a way that without bespoke Rolls-Royce wouldn’t exist. Nobody would buy the conventional Rolls-Royce anymore. There is hardly a car going down the line without any bespoke. It’s just unthinkable because today, in the luxury business, and that’s our business, not the car business, it’s not about I buy a product. It’s that you are also buying an experience. You are keen to experience something around it. And bespoke gives you that experience. We provide the canvas and you put your lovely painting on it. You tell us what you want and we will do it for you. And this is something you have commissioned yourself. It carries a lot of your own stories, stories you can tell to your friends. That’s the new way to showcase luxury.”
You can always get what you want
2021 Rolls-Royce Boat Tail.
LP: “It’s going back to what Rolls-Royce was. These customers have custom clothes. They had an architect design their house as well. So they’re saying ‘well why can I do that with my car?'”
TMO: “100%.”
LP: “And that explains your Coachbuild program.”
TMO: “It is the crown of bespoke, and something which is so truly unique and by invitation only. And it’s marvelous if you are a car aficionado to be part of the entire development process. You are the boss. And you sign off every single development phase?”
LP: “Does it surprise you that your clients have the patience for four years to wait until the car comes?”
TMO: “Not at all, because it’s not about the patience. They don’t buy the Coachbuild car. They buy the experience to be with us and shape the clay model is the product in itself. It’s part of it. So you are part of it. You sit together with our engineers. You are regularly invited. And you need to commit yourself contractually with us, that you invest the time to come regularly to see it, sign it off, sit together, commission it and so on. That’s very important. That’s why I’m not interested if people are throwing millions on the table and saying, ‘get me one.’ No. We want to know who you are. And you need to bring the patience and engagement with you to be part of it. And there are so many who are hungry for these kinds of experiences.”
LP: “You and BMW have really transformed the brand in the last decade and decade and a half. It’s a remarkable comeback.”
TMO: “Thank you for that. We are all very proud about it. And when you see how much celebrities are now in our client group, 25% worldwide, that indicates that we are relevant in the luxury segment.”
LP: “The cars still inspire and cause people to point. I’m not sure how many cars still inspire that anymore and it’s because you’re in class production, not mass production. I think it’s something most luxury automakers seem to forget, even Ferrari. I’m surprised that Ferrari is so intent on increasing their volume.”
TMO: “It’s because they are stock listed, and once your stock is listed, you have to report great numbers every quarter or otherwise your stock price plunges. And they do a good job doing it. That’s the only brand I would consider as being on as high level with us; the only brand. Nothing else.”
LP: “And if a product becomes too common, it’s not a luxury product anymore. You know, Ralph Lauren is not a luxury product because everyone owns Polo clothing of some sort. So many luxury brands make that mistake.”
TMO: “It’s the last thing you want. Rarity is important. High prices are important. And definitely the craftsmanship too. And high prices only come if you have nurtured your brand up to such powerful levels that people are prepared to pay half a million and far more for one.”