In 1904, Frederick Henry Royce built his first car, a Royce, in his electric motor factory. He met Charles Stewart Rolls on May 4th of that year and the pair agreed to an arrangement where Royce would manufacture cars to be sold exclusively by Rolls, who had been selling other top quality cars to a distinguished list of clients up to that point. The new company, formed in 1906, was known as 'Rolls-Royce' and moved to Derby in 1908.

The Silver Ghost put the Rolls-Royce Company on the map, earning a reputation with a highly reliable and virtually silent six cylinder engine. In 1910, Rolls became the first British subject to perish in an airplane crash, but the company continued on and prospered.

The production of the Silver Ghost began in 1921 and was officially known as the 40/50. It was produced in Springfield, Massachusetts in order to reduce manufacturing costs and void hefty import duties. The Phantom I was introduced in 1925 in Britain and a year later in the United States. The car was very similar to the Silver Ghost but had a modern long stroke, OHV engine. When production ceased in 1931, a total of 1,240 United States built cars were produced.