Silk-FAW drops plan to build Italian plant for electric sports cars

US Automotive Manufacturing

14/03/2023 13:38

MILAN, March 14 (Reuters) - The Silk-FAW start-up
comprising U.S. automotive engineering and design company Silk
EV and Chinese automaker FAW  000800.SZ  has abandoned plans to
build a production plant in Italy, according to a local
government document reviewed by Reuters on Tuesday.
    Silk-FAW signed an agreement in 2021 with local authorities
in the northern Emilia-Romagna region to build a production
facility and research centre in the city of Reggio Emilia, in an
area known as Italy's "Motor Valley" - home to brands including
Ferrari, Lamborghini, Maserati and Ducati.
    The facility was part of a wider plan to invest more than a
1 billion euros ($1.1 billion) to build electric cars in Italy
under the Hongqi brand.
    Silk-FAW sent a letter last month to the Emilia-Romagna
authorities to inform them of its intention to withdraw from the
accord, the document seen by Reuters shows.
    The document includes acknowledgement by the Emilia-Romagna
region of Silk-FAW's decision.
    Silk-FAW did not respond to a request for comment via the
company's website. The company does not provide contact details
for an official spokesperson.
    The business has showcased prototypes and had initially
expected to start car production at the beginning of this year,
but the company has not yet bought the land to build the site.
    Two sources close to the matter said 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
Reggio Emilia plant, the sources said.
    Silk-FAW did not respond to a separate request for comment
on the matter via the company's website.
($1 = 0.9338 euros)

 (Reporting by Giulio Piovaccari and Emilio Parodi
Editing by Keith Weir and David Goodman)
 ((giulio.piovaccari@thomsonreuters.com))