The iconic purveyor of James Bond’s favourite wheels is skidding dangerously close to the precipice once again. Aston Martin Lagonda (LSE: AML) shares have nosedived 40.5% year to date, with the stock plummeting to an all-time low of 62p following news of Donald Trump’s 25% ‘customs surcharge’ on imported vehicles.
A History Written in Red Ink
For a brand synonymous with British luxury and performance, Aston Martin’s financial trajectory reads more like a horror story than a tale of automotive excellence. Since its 2018 stock market debut at an ambitious £19 per share, the company has shed over 96% of its value, now trading at a meagre 62p. The numbers tell a sobering tale – since its IPO, Aston Martin has sold 40,937 cars while accumulating post-tax losses of £1.85 billion. That’s a staggering £45,289 loss per vehicle sold.
As one analyst wryly observed, “It would have been cheaper to give each customer £40,000 to go and buy a car from someone else!”
The Latest Chapter of Turmoil
The company’s 2024 results offered little comfort to beleaguered shareholders. Vehicle sales fell 8.9%, revenue dropped 3% to £1.58 billion, and post-tax losses ballooned to £323.5 million from £226.8m the previous year. Meanwhile, net debt has swollen to £1.16 billion.
The Americas, accounting for 1,928 units or 32% of Aston’s total sales, now represents the company’s largest market. This makes Trump’s new tariffs particularly painful, forcing the luxury carmaker to revise its outlook from “mid-single digit percentage growth” to merely “modest growth” in annual volumes.
Lawrence Stroll’s Deep Pockets
Executive Chairman Lawrence Stroll, who has already pumped about £600 million into the company since taking control in 2020, isn’t giving up. His Yew Tree Consortium is injecting another £52.5 million, purchasing 75 million shares to increase its stake from 27.7% to 33% – with potential to rise to 35%. The company is also offloading its minority stake in the Aston Martin Aramco Formula One team to shore up its finances.
The move requires a waiver from the Takeover Panel, as exceeding a 30% shareholding would normally trigger a mandatory takeover offer. As investment director Russ Mould noted, “It feels like a takeover would be a better outcome as it would mean the car company would be free to pursue a turnaround strategy out of the public spotlight.”
The Trump Tariff Dilemma
Britain’s finance minister Rachel Reeves has indicated the government is “working intensely” to secure an exemption from the US auto tariffs. Prime Minister Keir Starmer has stated that “all options remain on the table,” as the US represents the second-largest export market for British-made cars after the EU, with nearly a 20% share.
Reeves has also suggested the government could review its zero emission vehicle mandate, which currently benefits Tesla through the sale of surplus credits – a policy that might be recalibrated to better support domestic manufacturers like Aston Martin.
Glimmers of Hope in a Stormy Outlook
Despite the turbulence, CEO Adrian Hallmark insists a turnaround is imminent, with positive adjusted earnings and free cash flow expected in the second half of this year. The upcoming Valhalla hybrid supercar, scheduled for delivery next year, might inject some much-needed vitality into the brand.
Analysts maintain a cautious optimism, with a median target price of 105p – representing a potential 50% upside from current levels. However, given Aston Martin’s troubled history, including seven bankruptcies since its 1913 founding, any recovery path will likely be anything but smooth.
For a company whose vehicles exude confidence and power, Aston Martin’s financial performance continues to project vulnerability. The question remains whether this storied marque, which has survived decades of financial peril, can once again pull off an escape worthy of its most famous fictional driver.