Cars

The Beauty and Logic of the Million-Dollar Car

Be they small supercar shops or giant mass-market brands, almost all luxury automakers have a vehicle that will break the $1,000,000 mark. Here’s why

Photographer: Valentin Flauraud/Bloomberg

Lamborghini made three Venenos to celebrate its 50th birthday—and the supercar is fittingly named after one of the most famous, most aggressive Spanish fighting bulls. Each has a V12 engine and 740 horsepower, with a top speed of 221 mph and a paint job recalling the Italian flag. Price: $4 million.

 

Seen Furious 7 yet? You should.

Among the film’s hard bodies and the muscled engines, there’s a sexy little number that stands head and haunches above the rest: It’s called the Lykan HyperSport. The car is a $3.4 million beast with a top speed of 240 miles per hour and the face of a raptor. The huge audiences who saw the movie this past weekend won’t soon forget it—even if they’ll likely never see the vehicle in real life.

The Lykan is the first supercar made by a company (W Motors) based in the Middle East (formed in Beirut, with headquarters in Dubai). It’s also among the most expensive production cars ever to go on sale. But it’s not the only land rocket to come out lately that costs more than a million dollars. Far from it.

Over the past decade we’ve seen almost every automaker (that calls itself a true “luxury” brand, at least) produce a contraption with a seven-digit price tag. Sometimes they get there only by making a one-off with diamond-rimmed headlights and titanium bones, but they get there.

The Lykan HyperSport premiered at the International Dubai Motor Show in 2013. Top speed is 239 mph, with a 0 to 60 sprint time of 2.8 seconds. The car is rumored to have diamond and titanium accents in its headlights. Price: $3.4 million.
The Lykan HyperSport premiered at the International Dubai Motor Show in 2013. Top speed is 239 mph, with a 0 to 60 sprint time of 2.8 seconds. The car is rumored to have diamond and titanium accents in its headlights. Price: $3.4 million.
Photographer: KARIM JAAFAR/AFP/Getty Images

The brands make these cars because people buy them. The past few years have seen an explosion of royals and tycoons around the globe who buy entire fleets of Aston Martins and Lamborghinis to support their proclivities. Bloomberg has discovered more than three dozen new billionaires in the world since January alone, and more than 300 since 2012. They buy the cars in Los Angeles, in Doha, in Moscow and São Paulo and Shanghai. Some, like hotel tycoon Steve Wynn, buy them to bolster their business interests just as much as their personal life.

For them, it’s not that big a deal.

The Aston Martin One-77 was unveiled in Paris in 2008 as the British automaker’s most expensive offering to date. It has a V12, 750-horsepower engine, and only 77 were made. Price: $1.7 million.
The Aston Martin One-77 was unveiled in Paris in 2008 as the British automaker’s most expensive offering to date. It has a V12, 750-horsepower engine, and only 77 were made. Price: $1.7 million.
Photographer: Jason Alden/Bloomberg

“The fact of the matter is there are a lot of rich people around the world, and I mean super rich—hundreds of millions of dollars to billions of dollars of net worth,” says Jack Nerad, executive market analyst for Kelley Blue Book. “When you’re talking about these types of people, a million-dollar car isn’t really much of a stretch at all.”

The McLaren P1 was one of the original high-performance hybrid supercars, with a twin-turbo V8 engine and the equivalent of 903 total combined horsepower. Total range on the battery is more than 300 miles; the combined fuel economy when running on gasoline is 17 mpg. The car is limited to 375 units. Price: $1.35 million.
Photographer: Valentin Flauraud/Bloomberg
The McLaren P1 was one of the original high-performance hybrid supercars, with a twin-turbo V8 engine and the equivalent of 903 total combined horsepower. Total range on the battery is more than 300 miles; the combined fuel economy when running on gasoline is 17 mpg. The car is limited to 375 units. Price: $1.35 million.

 

The Lamborghini Sesto Elemento V10 coupe premiered at the 2010 Paris Motor Show. It has a six-speed semiautomatic transmission and a 60 mph sprint of 2.5 seconds. Fast, yes—but it comes without a radio or air conditioning. Price: $2.2 million.
The Lamborghini Sesto Elemento V10 coupe premiered at the 2010 Paris Motor Show. It has a six-speed semiautomatic transmission and a 60 mph sprint of 2.5 seconds. Fast, yes—but it comes without a radio or air conditioning. Price: $2.2 million.
Photographer: Antoine Antoniol/Bloomberg

It’s also lucrative for the carmakers, despite the extra work required to specialize a given automobile. Margins on a standard Ferrari or Lamborghini hover around 15 percent, and when the price tag on a particular car reaches into the seven figures, that amount can increase significantly.

“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 Maybach Exelero was introduced in 2004 and even then was notable for its extremely high price and famous reputed owner (the rapper Birdman; it also appeared in the Jay Z music video Lost One). Top speed is 218 mph, and it can hit 60 mph in 4.4 seconds. Price: $8 million.
The Maybach Exelero was introduced in 2004 and even then was notable for its extremely high price and famous reputed owner (the rapper Birdman; it also appeared in the Jay Z music video Lost One). Top speed is 218 mph, and it can hit 60 mph in 4.4 seconds. Price: $8 million.
Photographer: Cameron Spencer/Getty Images

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.

The Rolls-Royce Phantom Serenity’s entire interior was hand-stitched with hand-painted accents. It has cherry wood, bamboo, and mother-of-pearl inlay in the doors and dash. The clock in the front contains rubies. It was already bought by the time it premiered at the 2015 Geneva Motor Show. Price: $1.5 million.
The Rolls-Royce Phantom Serenity’s entire interior was hand-stitched with hand-painted accents. It has cherry wood, bamboo, and mother-of-pearl inlay in the doors and dash. The clock in the front contains rubies. It was already bought by the time it premiered at the 2015 Geneva Motor Show. Price: $1.5 million.
Photographer: Matthew Lloyd/Bloomberg

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.

The Bugatti Veyron Grand Sport Vitesse is a version of the Bugatti Grand Sport that comes with a Super Sport (1,200-horsepower, W16-cylinder) engine. It goes 0 to 60 mph in 2.6 seconds, with a top speed of 233 mph. Price: $1.8 million (base).
The Bugatti Veyron Grand Sport Vitesse is a version of the Bugatti Grand Sport that comes with a Super Sport (1,200-horsepower, W16-cylinder) engine. It goes 0 to 60 mph in 2.6 seconds, with a top speed of 233 mph. Price: $1.8 million (base).
Photographer: Scott Eells/Bloomberg

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.

“Halo cars like these serve to really capitalize the brand,” says Kelsey Mays, senior consumer affairs editor at Cars.com. “You look at Bugatti, which is owned by Volkswagen, and the only car everyone knows from Bugatti is the Veyron,” he says. “But they know it’s the one that Beyoncé buys for Jay Z. The real value … is in the association.” Bugatti is good for Volkswagen, even though by some estimates each Veyron that’s made and sold winds up being a loss of multiple millions of euros.

The Porsche 918 Spyder hybrid will hit 60 mph in 2.6 seconds and has a top speed of 210 mph. It comes with a V8 engine paired with lithium ion electric batteries. Base models start at $845,000, but upgrades push the cost up much higher.
The Porsche 918 Spyder hybrid will hit 60 mph in 2.6 seconds and has a top speed of 210 mph. It comes with a V8 engine paired with lithium ion electric batteries. Base models start at $845,000, but upgrades push the cost up much higher.
Photographer: Adrian Moser/Bloomberg

When people spend $200,000 on a Ferrari California T, they’re tapping into the elite aura that’s emitted by the $2.1 million Ferrari FXX. (There are only 30 of those, whereas thousands of Californias are made every year.) Every time a brand’s race car wins a Formula 1 event, or a newly unveiled concept vehicle shows off a brand’s ability to harness power and technology, the everyday drivers of the lower-tier cars get to feel like they’re part of the correct club.

The Koenigsegg Regera hybrid is the company’s latest model. It has a twin-turbo V8 engine paired with three electric motors, for a total combined output that’s the equivalent of 1,489 horsepower. Top speed is 249 mph; only 80 will be made. Price: $1.9 million.
Photographer: Gianluca Colla/Bloomberg
The Koenigsegg Regera hybrid is the company’s latest model. It has a twin-turbo V8 engine paired with three electric motors, for a total combined output that’s the equivalent of 1,489 horsepower. Top speed is 249 mph; only 80 will be made. Price: $1.9 million.

 

Finally, some automakers don’t want to persuade a broader market to buy their cars. Ultra-niche supercar companies such as Koenigsegg, Zenvo, and the aforementioned Lykan make limited runs of cars whose price tags can soar into the multimillions. They’re selling only to the über-rich, and in those cases the exclusivity is a big part of the draw: You can’t drive these cars except on a track, but that’s OK, because no one else can drive them at all.

These efforts are often a gamble—high risk, and not always high rewards. Zenvo, in Denmark, will make only 15 of its $952,000 ST1 supercars. They’re betting that the top speed of 233 mph and 1,104 horsepower will help them sell through the line, at which point the owners estimate they’ll break even. But before the Geneva Motor Show this year, the company had delivered only two and received orders for five more. Then it’ll be a few years before Zenvo can roll a new model off the production floor—a time period when bigger automakers can accomplish all kinds of feats.

New York-based Lyons, the only American supercar maker, is pinning its hopes on a 1,700-horsepower stealth bomb called the LM2 Streamliner. In theory, at least, the car will have a twin-turbo V8 with 1,610 pound-feet of torque, all put on a seven-speed gearbox. It looks like a cross between a demonic manta ray and a hooded slug. Talk about a niche audience. And the thing wasn’t even finished by the press previews of the New York Auto Show this month, where it was supposed to premiere. 

The Lyons Motor Car LM2 Streamliner. Price: $1.3 million (estimated).
The Lyons Motor Car LM2 Streamliner. Price: $1.3 million (estimated).
Source: Lyons Motor Car via Bloomberg
Mercedes brought back the Maybach brand to make a million-dollar stretch sedan, the Pullman. High-end options include full armor and noise-blocking, bulletproof windows, plus a 530hp V12 turbocharged engine. Price: $1 million (armored version).
Mercedes brought back the Maybach brand to make a million-dollar stretch sedan, the Pullman. High-end options include full armor and noise-blocking, bulletproof windows, plus a 530hp V12 turbocharged engine. Price: $1 million (armored version).
Photographer: Gianluca Colla/Bloomberg

It’s important to remember that a high price doesn’t mean you can have it all. You can probably get speed or strength or comfort in such an expensive car, but not all three.

To wit: The Lykan is fast, but its engine contains only six cylinders—the same number as pretty much every mass-made sedan on the road today. (Admittedly, the Lykan is the exception to the rule: Most million-dollar cars have 10, 12, or 16 cylinders.) Or take the million-dollar armored Mercedes-Maybach Pullman, which requires more than five seconds to hit 60 mph. Don’t buy it to win any drag races.

Or consider the $2 million Pagani Zonda, which has a certain flair but has endured persistent criticisms about its high maintenance costs and propensity to break down under even the slightest inclement conditions.

Photographer: Adrian Moser/Bloomberg via Getty Images

“Exotic cars are fairly unpractical,” says Cars.com’s Mays, in the understatement of the week. “You need a whole garage of things to drive when you own one of these—things that are a bit more rugged. With something like a Pagani, you need real roads and, ultimately, racetracks to stretch its legs.”

Of course, if you’re wealthy enough to afford something like the Pagani, you’re wealthy enough to afford the racetrack that goes with it.

Ferrari’s LaFerrari hybrid was unveiled during the 2013 Geneva Motor Show. It’s based in large part on the famous Ferrari FXX, with a body weight under a skeletal 2,800 pounds and a V12, 789hp engine. It’ll reach 60 mph in less than three seconds. Price: $1.69 million
Photographer: Alessia Pierdomenico/Bloomberg
Ferrari’s LaFerrari hybrid was unveiled during the 2013 Geneva Motor Show. It’s based in large part on the famous Ferrari FXX, with a body weight under a skeletal 2,800 pounds and a V12, 789hp engine. It’ll reach 60 mph in less than three seconds. Price: $1.69 million