Aston Martin’s revenue fell by 27% to £285mn in the third quarter, as total deliveries in the period dropped by 13% to 1,430 vehicles. Average selling prices fell at a faster pace of 20%, reflecting a sharp drop in sales of its high-priced Special models due to production delays. US tariffs and weak demand in China also weighed on performance.
Free cash outflows worsened from £81mn to £94mn, while net debt increased by 14% to £1.4bn.
The group expects to deliver around 150 Valhallas in the fourth quarter (Q3: 2 Valhallas), with that figure expected to rise to around 500 in 2026.
2025 total deliveries are expected to decline by a mid-to-high single digit percentage compared to the prior year (2024: 6,030). Full-year underlying operating losses are expected to exceed £110mn.
The shares rose 1.3% in early trading.
Our view
Aston Martin’s road to redemption looks increasingly challenging, with third-quarter revenue falling at high double-digit rates as only 1,430 cars were sold in the period. While external factors like US tariffs and weak demand in China have weighed on performance, production delays have once again hurt the full-year outlook.
The second half was meant to bring relief, driven by deliveries of the high-priced Valhalla supercar. But the ramp-up is slower than originally planned, adding further pressure on the fourth quarter to do some heavy lifting. And with the Valhalla still only 50% sold, there could be room for further disappointments in the new year if buyers aren’t found.
In the meantime, Aston Martin continues to burn through cash. Asset sales raised $108mn over the quarter to help shore up the balance sheet. That’s helping provide a short-term buffer, but it’s not a viable longer-term plan.
We also see scope for tariffs to cause further pain. The current regime allows the first 25,000 UK cars to be exported to the US each quarter to be subject to a basic tariff of 10%, on a first-come, first-served basis. Anything over that in each quarter will be subject to a much higher tariff of 27.5%. Given the lack of control, and the fact that around a third of Aston Martin’s revenue comes from the US, this is a significant trip hazard.
The current high level of debt and the associated financing costs are also a big problem. Double-digit interest rates show that lenders need to be compensated heavily for the high level of risk they’re taking on.
To make matters worse, the group still isn’t generating positive cash flows. That could spell real trouble if it runs out of funds to meet these obligations. As a reminder, debt investors are in the driving seat when it comes to claims on assets if Aston Martin fails to meet scheduled debt payments.
Given the group’s lack of scale (it made only 6,030 cars last year) even a small dip in volumes can have a big negative impact on profits and vice versa. Returning to profitability will require Aston Martin to grow volumes again, especially its higher-priced specials like the Valhalla, benefitting from the improved efficiencies that greater scale brings.
If management can deliver the expected improvements next year, there could be upside on offer. However, we’re quite concerned given the recent tariffs, struggling demand, production delays, and high rate of cash burn. As a result, we see scope for 2026 profit expectations to drop from here.
Environmental, social and governance (ESG) risk
Most of the auto industry falls into the medium risk category in terms of ESG. Product governance, particularly around safety, and the carbon emissions from companies’ products and services are key risk drivers. Business ethics, labour relations and operational carbon emissions are also contributors to ESG risk.
According to Sustainalytics, Aston Martin’s management of ESG risks is strong.
ESG issues are overseen by the board and overall disclosure is strong. There’s a robust environmental policy in place, with a commitment to net zero for scope 1 and 2 emissions by 2030 and scope 3 emissions by 2039 and has interim targets in place. However, AML doesn’t divulge sustainability-linked revenue and environmental impact isn’t systematically considered in the design phase. Although some of AML’s facilities are externally certified, scope is unclear and its product and safety programme needs improvement.
Aston Martin key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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