Ferrari has big product plans for the next four years, with 15 new models due out by 2026 — including the brand’s first all-electric model.
That yet-unnamed vehicle will mark the beginning of a significant transformation for an automaker whose logo features a prancing pony. The automaker expects battery-electric vehicles will account for 5% of its sales in 2025, the year the first BEV comes out. By 2030, that will rise to 40 percent. Add hybrids and “electrified” vehicles will account for 80% of its volume, company officials said Thursday during a meeting with analysts and investors.
“Everything we do will always focus on being distinctively Ferrari,” Chairman John Elkann said during opening remarks at the Ferrari Capital Markets Day event. “The opportunity set of electrification and electronics will allow us to make even more unique cars.”
Unprecedented ambitions
Ferrari had previously confirmed it was working on an all-electric vehicle, but the scope of its ambitions — part of the business plan revealed by CEO Benedetto Vigna — is unprecedented.
Vigna, who spent 26 years in the semiconductor industry before assuming the helm of Ferrari last year, is responding to a series of challenges forcing the Italian automaker to rethink its traditional focus on high-performance internal combustion engines:
- Automakers, in general, face increasingly restrictive government mandates, especially in Europe and China, that aim to phase out ICE technology;
- New entrants to the automotive market, such as Rimac and Tesla, have shown the performance potential of electric propulsion. Tesla’s Model S Plaid can launch from 0 to 60 in about 2 seconds, making it the fastest street-legal production model ever;
- Ferrari’s traditional competitors are also shifting to electrified drivetrains. Lamborghini will begin migrating to plug-in hybrids in 2023, with at least three, possibly four, BEVs in its line-up by decade’s end.
Enhancing performance
Ferrari isn’t entirely new to electrification. It used a race-derived HY-KERS hybrid system in its La Ferrari hypercar and a plug-in hybrid system powers the new SF90 Stradale. But it won’t have a pure electric offering ready until 2025.
How Ferrari customers will respond to battery power is yet to be seen. Hybrids have the advantage of boosting power and performance without sacrificing some of the traditional Ferrari attributes, including the distinctive sound of its engines. But all-electric models operate in near silence.
“We believe we can use the electric engine to enhance the performance of our cars,” CEO Vigna said Thursday, while maintaining attributes that Ferrari customers crave.
Boosting profits despite higher costs
While manufacturers across the industry are going electric, Ferrari has some advantages compared to more mainstream brands. Its customers are used to spending big bucks — the “entry” Portofino model currently starting at $215,000 — and are more likely to ignore the premium associated with battery drive technology.
The question many analysts have asked is whether Ferrari can make the switch to electric drive without sacrificing the hefty profits it currently generates. It does have a good example to point to: only Tesla currently delivers better margins.
If anything, Ferrari expects the mix of new electric vehicles to help boost demand for, and earnings from, its conventional product mix. It also sees significant opportunities for its first-ever SUV, the Purosangue model debuting in September.
During the Capital Markets Day event, officials forecast adjusted EBITDA numbers will grow to 2.7 billion euros in 2026, up from 1.5 billion in 2021.
The switch to electric will, nonetheless, be costly, at an estimated 4.4 billion euros, or $4.6 billion, through 2026. By then, it expects BEVs and PHEVs to account for 60% of its model line-up.
“The direction is clear”
To handle production of the newly electrified models, Ferrari is expected to add a third production line alongside its current operations in Maranello, Italy.
Ferrari will seek partners to help in its push to electrify. The automaker “would be foolish” to develop its own EV operating system, for one thing, Vigna said. “You have to focus on areas where you can be the best.”
The announcements made Thursday weren’t entirely unexpected but appeared to receive a warm response
“The direction is clear,” Kepler Cheuvreux analyst Thomas Besson wrote in a report on the Ferrari strategy. “Electrification is required but will not change the DNA of the company and its products.”