By on August 5, 2011

NHTSA has denied the niche supercar maker Pagani a waiver for advanced airbag requirements for its new Huayra, possibly forcing the Italian firm to delay US sales until 2015. According to the Federal Register[PDF], Pagani

estimated that if the requested exemption were granted, it would sell 35 to 45 vehicles per year, 6 to 12 vehicles of which would be sold in the United States…. [Pagani] submitted projections estimating that if the petition for exemption is denied and no vehicles are sold in the United States, the company would make an estimated €5,398,000 in net income during the period of 2011 through 2014, compared to €8,613,000 in net income during the same period if an exemption were granted.   The company asserted that the difference in gross revenue between granting and denying the exemption is approximately €34,000,000, and the financial records indicate a difference in projected net income of approximately €3,215,000.

Although Pagani has realized profits in recent years, the company asserted that immediate compliance with the advanced air bag requirements will cause substantial economic hardship.  Specifically, Pagani stated that the company only operates on the cash on hand without lines of credit or debt financing, and its small profit margin is necessary to guard it from market fluctuations. Pagani stated that without an exemption, it will not be able to fund the advanced air bag program, which is estimated as costing €4,000,000, from its non-U.S. sales and will not be able to enter the U.S. market until at least 2015.

Finally, Pagani stated that its production capacity is currently limited to approximately 25 units per year worldwide.  The company indicated that its plan is to expand its production capacity to 50 to 60 units per year worldwide by building a new factory.  However, the company stated that the new factory represents a significant investment for the company and could not be justified without the revenue from U.S. sales.  Accordingly, construction of this new facility cannot begin unless an exemption is granted.

So let’s see: the company hopes to build 60 units per year, stands to lose nearly $50m in gross revenue and nearly half it’s net profit if the request is denied, and will lose access to a huge market for four years… why doesn’t the government count this as a “hardship”? Is NHTSA really that concerned about protecting the handful of  bajillionaires who will be buying the $1.4m Huayra and likely keeping them at a track anyway? The problem: it turns out that Tesla, which enjoyed a waiver for years while receiving tens of millions in taxpayer-backed loans, has ruined the waiver for everyone. According to NHTSA’s post-Tesla change of heart:

low volume manufacturers now have access to advanced air bag technology. Accordingly, NHTSA tentatively concludes that the expense of advanced air bag technology is not now sufficient, in and of itself, to justify the grant of a petition for a hardship exemption from the advanced air bag requirements

Oh well, nobody’s going to miss one of the coolest, most exclusive, most jaw-dropping cars in the world for a few years, while Pagani installs advanced airbags. American bajillionaires just love to be last in line for the new hotness…

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5 Comments on “Pagani Huayra Airbag Waiver Denied: No US Sales Until 2015?...”


  • avatar
    sitting@home

    For every law there’s a loophole, and the richer you are the bigger the loophole. I’m sure if a bajillionaire wants one of these so he can cruise for young ladies outside Hollywood nightclubs while his wife is away at a starvation spa, then there will be a way to get it.

    Couldn’t he import the car in kit form and get some desperate car guy he knows (say the CEO of GM) to build it for him ?

    Maybe he could pick one up when his yacht drops anchor in Monte Carlo and bring it back over here as a personal possession.

  • avatar
    ClutchCarGo

    “why doesn’t the government count this as a “hardship”?”

    Because if you give an adv airbag waiver to one $1.4M supercar mfr, every $1.4M supercar mfr will want one, too.

    Seriously, tho, they can’t license somebody else’s adv airbag technology for less than 4M euros?

    • 0 avatar
      roamer

      It’s not R&D that costs; the only way to pass the testing is to give the government several of each car you want federalized. No simulation is permissible; all the tests (low speed, high speed, side) have to be performed on a new car, which is a write-off. If you assume they destroy 3 cars, that’s $4.2 million in lost revenue. Add the actual engineering cost, and it gets pricey quick.
      Why can’t they just create a blanket rule for low-volume manufacturers to allow buyers to sign a wavier that they know what they are doing? Because this is the guv’ment, and they know what’s best for us.


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