Could e-fuels drive Ferrari’s electric vehicle output?
In February this year, Ferrari chief executive Benedetto Vigina announced the Italian car manufacturer would soon be unveiling its electric strategy.* In a recent Third Bridge Forum Interview, a former executive at Aston Martin Lagonda Global Holdings plc told us retaining brand integrity will likely be Ferrari’s “biggest challenge” as it attempts to make the EV switch.
In the Interview, the specialist said Ferrari’s volumes could increase by 10% this year. They told us key growth drivers will be the “high-margin” SF90 and SF90 Spider. They also expect the 812 Competizione to launch in Q3-Q4 of this year and for it to be “aggressively priced”. Ferrari’s improved Formula 1 performance in 2021 and strong showing so far this season were also highlighted by the specialist as peripheral growth drivers.
By 2023-2025, Ferrari’s volume could rise to 15,000-16,000 units per year if it begins selling an SUV, we were told. Ferrari is currently “behind on the SUV game”, according to the specialist, having been initially sceptical of a luxury SUV. The COVID-19 pandemic forced Ferrari to push its SUV launch back to 2023, but the specialist expects that, once launched, it will be able to take customers from Lamborghini, Bentley and Aston Martin.
Ferraris prices could rise by 5-7% for existing models and 15-20% if models are substantially altered, we were told. However, these price rises are unlikely to drive margins. Instead, the specialist said they will likely be used to offset inflationary pressures.
By 2032-2033, the specialist predicts 90-95% of Ferrari’s car mix will be EVs. Before then, the specialist said Ferrari needs to devise how it can retain the “credibility” and “sound” of a Ferrari that customers expect. They suggested that e-fuel vehicles might be an option if the company can develop the technology and provide governments and authorities with a compelling case for their use. If it can, the specialist sees no reason why e-fuels cannot form a “reasonably significant part” of its future model mix.
As Ferrari looks to increase its EV output, the specialist speculated that it could find a strategic partner to work on battery cell development. However, the specialist dampened expectations that other joint ventures or M&A activity could occur, stating that the company would try to in-source where it can so it does not “risk the brand”.
To access all the human insights in Third Bridge Forum’s Ferrari – Volume, Pricing & Profitability Analysis Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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