A Classic Mercedes Roadster Is Going Electric in a New Partnership

Hemmels, a Cardiff, Wales-based company that rebuilds Mercedes-Benz SLs, will soon offer an electric drivetrain for the W113 “Pagoda” models to the tune of half a million dollars through a new partnership.

The W113 SL is a glamorous two-seat roadster, which replaced the 190SL. It was introduced as the 230 SL at the 1963 Geneva Motor Show, then was gradually replaced by larger-engine models until the end of the line in 1971. The model was quite popular in the U.S., where nearly 20,000 were sold.

“We were on a route to develop a battery powertrain in-house at Hemmels, and we began to realise what a complex undertaking it is, given international regulations. That’s when we discovered that Everrati had already engineered a solution,” says CEO Tom Butterfield.

The result is a collaboration between Hemmels and Everatti—which restores and electrifies classic “icons” from Porsche, Mercedes, and Land Rover from its base in Bicester, Oxfordshire. Hemmels will restore the cars and Everrati will install electric powertrains. The partnership will be officially announced on Friday, and SLs from both companies will be shown at the upcoming Pebble Beach Concours d’Elegance during Monterey Car Week (Aug. 9-18). The first jointly produced car should be available to customers in November or December. Ordering a car and taking delivery will take eight to 10 months.

The price for a full Hemmels build, with the Everrati electric drivetrain, is £400,000 (US$513,000), excluding the donor vehicle that the company can locate for customers. The cars will be offered internationally.

The SLs will have 68-kilowatt-hour batteries, distributed to help maintain the car’s ideal front-rear balance.

“The bulk of the weight will be where the original engine and gearbox were located, and there will also be batteries in place of the fuel tank and a small pack in the boot [trunk] occupying about the space of the spare tire,” says Justin Lunny, Everrati’s founder and CEO. As battery technology evolves, Lunny says, it should be able to get a more powerful pack into the same locations, and upgrades can occur.

Another British company Helix, a Lotus supplier, will provide a power-dense but compact 300-horsepower motor that together with the battery pack should yield a range of 200 miles and a zero-to-60 miles per hour time of under seven seconds. The cars will use a limited slip differential for good grip, and will be equipped for regenerative braking—recapturing energy and allowing “one pedal” driving. “The end result is a very usable driving experience,” Lunny says.

“Our process in rebuilding the cars is very in-depth, and it’s what makes us stand out,” says Butterfield, whose family bought Hemmels in 2018. “We use brand-new and upgraded parts—we don’t restore what’s there unless we absolutely have to go that route.” The restoration process can take 4,000 worker hours, and bespoke buyers have wide latitude in colours, interior materials, and a choice of options. High-end audio and Bluetooth are available.

The cars will have already been rebuilt by Hemmels by the time they take their 130-mile journey to Everrati, where the drivetrains are—very carefully—installed.

Lunny says that the SLs will not be cut up or altered during the drivetrain installation. “We don’t damage the structure of the vehicle,” he says, “and everything is technically reversible. We retain the value of the original vehicle. The owners can keep the original internal-combustion engine, ensuring that it’s still with the car.” Butterfield adds that one of his clients is turning his engine into the base “for a glass table that will be installed in his man cave.”

Lunny describes the SLs as “art pieces that happen to have wheels. We love them like our babies, and everything we do is to a replicable standard, on par with what an [original equipment] manufacturer would do.”

The W113 SLs may be more than 50 years old, but their styling—and appeal across generations—remains timeless.

“It’s not just a certain age or demographic,” Lunny says. “The new audience is the ultra-high-net-worth individuals who adore beautiful iconic cars, especially the Pagoda, but want a clean-air powertrain, with modern air conditioning, that is enjoyable to drive.”

Butterfield intends to keep production relatively low, producing perhaps 10 to 12 electric Pagodas annually. “To stretch to 25 cars per year would risk the quality of our builds,” he says. Some 60% to 70% of Hemmels’ output has gone to U.S. buyers, and that’s one reason the Monterey appearance—the company’s first—is important to the brand.

Hemmels also works its magic on the earlier 190SL, and electric conversions of those models, through the partnership, are possible in the future, Butterfield says.

AI agents like Muse can already find you the cheapest hotel room in Paris. But they can’t locate a cheaper version of that Catskills cabin you’ve been eyeing, because it might only be available on Airbnb ABNB -1.43%decrease.

Investors should pay attention to that distinction. When Meta Platforms META 3.38%increase launched its Muse agent last month, travel stocks including Booking Holdings BKNG -1.19%decrease, Expedia and Airbnb all fell sharply.

Airbnb, though, has a real chance to emerge as a winner from the upheaval. The catch: Its stock already reflects above-industry growth. To justify its valuation, Airbnb will need to turn repeat customers into loyal ones.

Online travel companies make much of their money by simplifying search and collecting fees on bookings. AI agents threaten that model.

But not all travel marketplaces are equally exposed. Booking and Expedia largely sell hotel rooms that travelers can also book directly or through competing sites. If an agent can find the same room elsewhere, it has little reason to favor either Booking or Expedia.

Booking and Expedia also sell sponsored listings that steer travelers toward particular properties. Wells Fargo estimates those will account for about 8% of Expedia’s revenue and a much higher percentage of profit next year.

Airbnb has more ways to adapt. More than half its listings are available only on its platform, and more than 90% of its traffic comes directly to its app or website.

The customer relationship doesn’t end after booking, either. Bernstein analyst Richard Clarke notes that 90% of Airbnb guests go on to message their hosts about arrival times, keys or local taxes, giving Airbnb a connection to both sides of the transaction.

How the companies have responded to the possible agentic future is telling.

Expedia quickly signed on as a Muse partner. Airbnb hasn’t, and Chief Executive Brian Chesky says AI chatbots have so far been a boon, sending customers to Airbnb’s website.

Chatbots might work for buying paper towels, he quipped at a Skift conference last month, but people enjoy planning trips. He argued that browsing dozens of homes isn’t something a text-based chatbot is well suited for.

Still, the AI jitters arrived just as Airbnb was persuading investors it deserved its pricey multiple. For years after its 2020 initial public offering, the stock—which trades around 25 to 30 times forward earnings—went nowhere. Investors saw a mature operator trading at a growth premium.

This year, Airbnb growth seems to be accelerating. The stock jumped in August after the company raised its full-year revenue-growth guidance with its second-quarter results. Wells Fargo analyst Ken Gawrelski credits a run of product improvements under a revamped leadership team.

Among the changes: letting guests reserve now and pay later, adding hotels, and a redesigned home page and app. Investors were also betting on what comes next, including thousands more hotels, car rentals and, eventually, advertising.

The irony is that some of those growth drivers push Airbnb closer to the kind of business Booking and Expedia run—the kind of business AI agents could threaten. Even if AI agents capture a large share of travel planning and booking, Airbnb would capture the demand. But it and others would slowly lose control over how customers find and choose properties.

That would undermine the advertising opportunity investors are counting on. The bigger point for Airbnb and other marketplaces is that losing control of customer acquisition could mean surrendering some of their pricing power and margins.

To bulletproof itself, Airbnb might look to another e-commerce giant that has so far kept AI agents at arm’s length: Amazon.

Like Amazon, Airbnb has a loyal customer base and hard-to-match supply. But it has nothing like Prime membership to make customers think twice before taking their business elsewhere.

That is where loyalty comes in. Business travelers stick with Hilton or Marriott because enough nights earn them perks. Leisure travelers rarely accumulate stays with one chain. Airbnb has millions of listings and plenty of repeat customers, but no broad rewards program. It has begun experimenting with credits on hotel stays, but it should make loyalty a priority, not just a promotion.

Airbnb also plans to launch its own AI agent next year. But travelers using an agent might still want it to search Airbnb, Vrbo, Booking and hotel websites alike, rather than limit itself to one company’s inventory.

Eventually, Airbnb might have to strike deals with agent makers, using its unique homes as leverage to negotiate favorable terms, says Gawrelski. Such deals, along with rewards for loyal guests, could over the long term eat into the company’s roughly 13% take rate, he adds. But if they bring in enough additional bookings, the trade-off could be worthwhile.

History offers a reason not to panic. The shift from desktop to mobile unsettled investors in Alphabet and Amazon, but both emerged as major beneficiaries. Companies with valuable assets can come out of a platform shift stronger, if they adapt quickly enough.

Airbnb has homes the bots can’t easily replace. Now it needs to give guests a reason to insist on booking them there.

A Classic Mercedes Roadster Is Going Electric in a New Partnership

AI-powered travel agents are challenging online booking platforms, but Airbnb’s exclusive listings and direct customer relationships could give it an edge. Its next challenge: turning repeat guests into loyal customers through stronger rewards and innovation.