FIRST PUBLISHED IN WSJ. MAGAZINE, NOVEMBER 2013
MATE RIMAC guides the Concept One—a prototype electric sports car he first designed when he was 21 years old—onto a stretch of road in Sveta Nedelja, a suburb west of Zagreb. The cherry-red vehicle is low, sleek and hardly subtle. Stepping gently on the accelerator, Rimac propels the car to 60 mph in less than three seconds. Jerking the steering wheel, he screeches through a roundabout before returning us to the parking lot outside Rimac Automobili—the Croatian engineer's automotive start-up—where he flings the car into a tight circle, pinning me hard against my seat.
"I'm not showing off," says Rimac through a haze of tire smoke. "I want to show you that the technology is reliable enough to do crazy stuff with an electric car. It's not just something that looks pretty at an auto show. We can build it today. We just need scale."
Unofficially, the Concept One is the world's fastest accelerating electric automobile. The car spreads 1,000 hp across four motors—one for each wheel. As the car turns a right corner, the front right wheel can break for a fraction of a second while the rear wheel generates power. It's an innovation that Rimac, now 25, points to as the "kind of stuff you can't do with an engine," and which defines the Concept One, in his self-confident estimation, as "the sports car of the 21st century."
The official Guinness records for the world's fastest accelerating electric automobile, which hang on the wall of the company's airy white-tiled showroom, belong to a converted 1984 E30 BMW parked in the adjacent shop. Rimac uses the boxy green vehicle as a "test mule" for technologies his company develops. He built that car when he was 19. At the time, Rimac had been winning international competitions for an electronic glove he devised in high school that functions as a keyboard and mouse, and came up with an idea for a car mirror system that eliminated blind spots.
After licensing his mirror invention to a European automotive supplier (Rimac is bound by an agreement not to disclose its name), by 2008 he'd earned enough money to buy the used BMW, which he then began entering into "drifting" competitions (a motor sport in which the car goes into a controlled skid). When the engine blew up after a few races, Rimac decided to marry his passion for cars and electronics. He'd always reveredNikola Tesla, the Croatian-born inventor and electrical engineer, and it occurred to Rimac that an electric motor—a source of instant power, free of cumbersome spark plugs and oil filters—would yield a superior sports car. "It wasn't about making the car environmentally friendly," he says. "The performance is just much better."
It took Rimac six months to convert the BMW into an electric car, using off-the-shelf components. Back at the Croatian racetrack, he was mocked. "What are you doing with this washing machine? Can I charge my phone with it?" competitors joked. Something always broke after each race, but Rimac kept tinkering, designing all the parts himself. The car eventually became "quick enough to whoop a Tesla in a street race," as one auto blog reported. By 2010, Rimac's DIY vehicle was trouncing even gasoline-powered cars.
"At that point, it started to get serious," Rimac tells me. A Croatian businessman approached him on behalf of Abu Dhabi's royal family. They wanted to see a prospectus. "They said, 'We want two cars,' " he recalls. "I was like, 'We're just a couple guys in a garage.' " He set to work on the Concept One.
What began as a hobby then turned, almost by accident, into a business. Today, Rimac Automobili employs 22 people, mostly Croatian engineers (the one non-Croatian employee, the company's head of sales, came from Tesla Motors). Thinking it would be wise to hire someone with actual car-making experience, Rimac Automobili initially brought in an engineer from BMW. But his high salary, and the specialization he'd grown accustomed to from working in the car industry, were not a great fit for the company's start-up culture, where the guy who makes the brakes also orders the parts for it.
"It was a learning curve—we made mistakes," Rimac admits. "But eventually I realized we were doing something right: developing cars for a lot less money than big car manufacturers and managing to beat them in many fields. We have an advantage starting with a blank sheet of paper. There's no heritage that we have to incorporate into the design."
For the first year, Rimac, then 22, hobbled along on a shoestring, helped by some seed money from his father—a shopping-center developer—and the promise of investment from Abu Dhabi. "I sold everything I had just to pay the rent," he recalls. In a superstitious mood, Rimac and his girlfriend, Monika Mikac, the company's head of public relations, concocted a reverse incentive: They vowed to swear off two of their biggest vices—chocolate and potato chips—for an entire year if the company finished a prototype for the Concept One by the 2011 Frankfurt Motor Show.
When the Concept One debuted in Germany, the industry took notice: The all-wheel-drive vehicle reaches a maximum speed of 190 mph and boasts an average range of 150 miles on a single charge. The power-to-weight ratio is on par with a Formula One engine. Rimac replaced conventional mirrors with cameras, linked by fiber-optic cables, and added a few other luxury flourishes, like self-closing doors.
Most of the components—almost everything but the battery cells and air bags—are developed in-house. Rather than use molds to make the wheels or pedals, as is typical in mass production, two large milling machines cut parts out of solid aluminum blocks, a costly process that enables the company to adapt quickly to design changes. "Only Formula One cars or spaceships are made this way," Rimac explains. "Nikola Tesla had to go to America to be successful. I wanted to stay here to give young Croatians a chance to work on something interesting."
With only one complete commercial vehicle sold to a European car manufacturer, the company was desperate for revenue. What sustains Rimac Automobili is designing and producing various components—electric power trains or battery management systems—for other automotive companies. Recently, Applus Idiada, an automotive engineering company in Spain, commissioned an electric supercar made with the windows and roof of the Concept One but built to different specifications. Rimac has sold batteries to a company that's building levitating trains, and he hints at a breakthrough in the works for "the next generation of braking systems.
"We can design and build prototypes fast and inexpensively, and not just for electric cars. We make chassis, electric parts, molds—all under one roof. But if BMW wants to develop a supercar with an electric power train, the best one on the market is from us," Rimac says. "Our technology could end up in a high-volume product under a different brand. If we had sufficient funding, we probably wouldn't do this kind of stuff. It's a simple matter of survival. Enzo Ferrari started to make road cars just to finance his race cars—he did it to pay the bills."
Building a show car to drive business to its engineering services is a strategy that many auto companies adopt, explains Christoph Stuermer, an industry analyst with IHS Automotive in Frankfurt. "Part of Tesla's business plan is to license out other technologies. There are similarities there," says Stuermer.
Looking ahead, Rimac intends to ramp up production of the Concept One, release a new model every two to three years and keep slashing the sticker price. (The car currently lists for $1 million.) He views his target customer as more of a Bugatti or Ferrari enthusiast, rather than a Tesla driver. Indeed, Rimac brushes off comparisons with Tesla, not just because he believes his company occupies a different market, but because Tesla's $465 million in federal loans places the company on an unequal playing field.
Although Rimac Automobili has carved out novel revenue streams, questions over its financing still dog the company. "The government won't help us, banks won't give us loans and there aren't foreign investors in this region," Rimac says. This hurdle is one shared by scores of other electric automobile upstarts operating out of garages and universities: Capital is scarce. Still, Rimac may be able to get by producing a handful of Concept Ones a year, appealing to that niche of customer that manages to keep high-performance automakers like the Italian supercar manufacturer Pagani afloat. For now, he can keep eating chocolate.