Ferrari is getting ready for electric cars. Like the other car companies, the Italian company will no longer be able to sell gasoline cars in Europe after 2035. After the first hybrid cars came out, like the SF90 Stradale or the 296 GTB, with a clear focus on performance, the brand is getting ready to release its first electric car in 2025. To do this, it has bought more land near its Maranello plant to build a production line for hybrid and electric cars.
Next week, Ferrari will show its new strategy for the next four years, which includes information about the arrival of new hybrids like its first SUV, the Purosangue, and its first electric car, which will come out in 2025. The company will also talk about its plans for electrification. On Thursday, June 16, his CEO, Benedetto Vigna, will confirm these plans and give more information about the next steps Ferrari will take to make its cars electric.
Unnamed sources told the Bloomberg news agency that buying these lands with Maranello is part of this plan, and that the third line that will be built in that space will be used to put together electric and hybrid cars from the brand in the future. A battery research and development center will also be built along with the production line.
More unknowns than certainties
At the moment, Ferrari is the most popular brand in the world, but it will be one of the brands that will be hurt the most by electric cars. More than anything else, because the combustion engine is at the heart of Ferrari more than any other brand. When Enzo Ferrari said, “When you buy a Ferrari, you’re paying for the engine,” we all took note. I give away the rest.” This is just an example of what Il Commendatore thought. He also said, “Aerodynamics is for losers who don’t know how to build engines.” Electric cars, in which the engine is not very important and aerodynamics is very important, would be their worst nightmare, for sure.
We also don’t know if Enzo Ferrari, who was a lifelong fan of cars and gasoline, would be okay with Benedetto Vigna, a highly technical person from STMicroelectronics who has never worked in the car business, being in charge of the brand he started. Since he started working there, Vigna has done a lot to change the way the brand is run. He has brought in former coworkers from STMicroelectrics and teamed up with companies like Qualcomm to improve the cars’ technology.
Even if Enzo didn’t like it, it seems like Vigna is the best person to make the brand more exciting. He has a profile that can separate the emotional part from the logical and practical parts. Investors, on the other hand, have a lot of doubts about how Ferrari is being changed. Goldman Sachs told the company in June 2021 that it should sell its shares because it will cost a lot to make its first electric cars. “We might think that Ferrari’s efforts to develop new technologies are good in the long run, but for investors right now, this change creates uncertainty about the need for capital spending and what that means for profits and cash flow,” signed several analysts from a large North American bank at the time.
The goal will not be met by 2022
Even though it’s been a year, the doubts haven’t gone away, and as the launch of its electric offensive gets closer, not even Ferrari’s enviable economic results in terms of profit margins, turnover, and profits have been enough to convince investors to bet on the company. In fact, it has already lost more than 22 percent on the Milan stock exchange in the past few months. Luxury Brand Equity Fund told Bloomberg, “The question is its strategy for electrification and how it will be able to adapt its technology to a changing world, as well as how its strategy of pursuing value through volume changes over time.”
It looks like Ferrari won’t be able to reach its goal of doubling its profit this year compared to 2018 through Covid. This is because the company started a plan that focused on making more margin per unit through special editions and more expensive cars. The goal was 2 billion euros, but only 963 million euros were reached in 2021. If this isn’t done, it hurts investor confidence and puts a brand in a tough spot where it will have to go through a big change in the next few years that will determine its future.