News & Analysis

Rolls Royce share price is a 'Silver Ghost' of its illustrious past

Andrew Saks, Monday, 19 July 2021

When Welsh aviation and motoring pioneer Charles Rolls co-founded his company in conjunction with Sir Frederick Henry Royce over 115 years ago, the two dare-devils would likely never have imagined that their experiments with motive power on land and in the air would one day be the subject of derision by global governments.

Even less would they have imagined that there would be, one day in the distant future, a draconian 'climate change' bandwagon whose adherents would blame their inventions for impending catastrophe.

Greta Thunberg and the founders of Rolls-Royce could not be more opposed in pretty much every aspect.

An illustrious history of prestige motor car manufacturing and elegant RR badges having adorned the engines of the world's most successful commercial airliners from Concorde to the Boeing 787 as well as at the hands of the heroes of the Royal Air Force led Rolls Royce to be one of Britain's institutions.

A publicly listed piece of the family silver, held in almost the same esteem as the Crown Jewels.

Despite there being more Rolls Royce motor cars on the roads now than ever before, the company's perceived success is unfortunately a bit of a damp squib. A damp Axminster carpeted, lambswool rug-covered squib.

Rolls Royce stock, which is listed on the London Stock Exchange, has been declining in value since last year, and today it is down 3.6% in just one day, bringing it to a one-month low of 89.4p per share.

Airlines and aircraft suppliers are coming under pressure to make big cuts to their carbon emissions. To help meet these goals quickly without drastic cuts to flying, Rolls-Royce is working on a plan to make its engines compatible with “100% sustainable” synthetic fuels.

This bureaucratic obstacle is something that Rolls Royce has taken into account. A year ago, the company allowed an Australian motoring journalist who goes by the rather un-Rolls Royce-like moniker 'Supercar Blondie' to preview an electric luxury car in the form of a fully operational prototype.

Whilst the car was absolutely cast in the opulent spirit of Rolls Royce, it was a glimpse into the future, and will not be ready immediately and that is part of the problem.

For less than half of the cost of a new Rolls Royce, it is possible to buy a luxury car from other manufacturers which is at least partially electric, in some cases fully electric, and has driver aids such as autonomous driving that is now de rigeur.

Quite simply, Rolls Royce is now part of the old school once again. Its fabulous current model range has been overshadowed by ultra-modern entries that have moved the entire industry forward in a revolutionary manner to the extent that even the Ghost and the Wraith are at a similar staus to the Silver Seraph of the 1990s with its gargantuan proportions and entirely analog topography.

The days of the pushrod 6.7 liter V8 which could trace its roots to the 1950s which was still appearing in new cars during the late 1990s are well and truly back.

To combat this competitive onslaught from Germany, the United States and Sweden, Rolls Royce says that by 2030 all new engines will be “compatible with net zero" and that by 2023, some existing models of engine will also be compatible with synthetic fuels, allowing airlines to clean up their existing aircraft.

Boeing is already well and truly underway with the development of a hybrid airliner that will travel long distance and carry 500 passengers using an electric fan engine and a kerosene generator to charge its batteries during flight.

Boeing is one of Rolls Royce's largest customers for engines, yet this is being developed in house under the name SUGAR Volt, with its own engines. SUGAR stands for Subsonic Ultra Green Aircraft Research, which is in tune with the overtly zealous nature of today's climate lobby.

Rolls Royce has done well in the face of adversity. it is not easy to manufacture cars and aircraft engines and turn a profit. It is a difficult industry and highly competitive with huge R&D costs.

Let's hope it gets itself out of the doldrums, however for now, confidence is low.

 

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