“If you have to set up a separate assembly line, it can become expensive to produce” an automobile, Nerad says. “But with million-dollar cars, there’s still money to be made.”
The basic rule is that it takes $1 billion to develop and produce a normal mass-market car. But developing one that’s not accessible to the public can cost less than that, because resource needs are narrowed. Plus, it’s easier to recoup the expense when price tags are in the millions rather than, say, $30,000. That’s true even if a company sells only 300 of the car.
These super expensive cars fall into different categories. Some, like the Bugatti Veyron and Lyons Motor Car’s LM2, are truly unique and made in minuscule production numbers. Others are special editions of existing models (see: Lamborghini and Ferrari).
Let’s look at how a Rolls-Royce gets to a million dollars. A base-level Phantom starts at about $400,000. Then you add custom treatment, which most of them receive: That’s special wood, paint, and leather that can hike the price by hundreds of thousands of dollars. (Really.) Getting the full-armored treatment on a sedan can cost almost half a million dollars alone.
And at that point the real heavyweight treatment starts: true bespoke, one-of-one work that adds precious gem and pearl accents, hand-stitching, bulletproofing, theater systems, and elite engine tuning.
That last stage is where a standard Phantom crosses the million-dollar threshold.
“The trend is growing, and it’s driven by bespoke cars like our Serenity,” says Gerry Spahn, Rolls-Royce’s head of communications, referring to the $1.5 million Phantom it introduced last month in Geneva.
You can probably get speed or strength or comfort in such an expensive car, but not all three
Then there’s what automakers call a “halo car.” That’s when a brand that makes several different lines comes out with a concept car or ultrahigh-end superstar that serves a purpose beyond its own price tag. In fact, the indirect monetary benefits of making a halo hypercar are usually more important than direct profit.
High-profile products can make the entire brand shine like a backlit Hope Diamond—the brilliance associated with the crown jewel car inevitably rubs off onto the less expensive offerings in the fleet. If the cachet is compelling enough, it will deliver cash.