Ferrari aims to make two out of five cars it sells entirely electric by 2030, as the luxury brand tries to reconcile the need to reduce emissions with a reputation built on the ingenuity of its conventional engines.
Those goals were among several, including a pledge to raise dividends and buy back shares, that the company set on Investors Day at its headquarters in Maranello, northern Italy.
Unveiling the new business plan, the company’s CEO, Benedetto Vigna, said luxury sports car maker Ferrari has always produced one less car than wealthy customers would like to maintain its exclusivity as it switches to electric models.
Vigna confirmed the automaker’s plans to launch its first electric model in 2025. Under its plan, nearly 40% of its sales will be electric in 2030. Another 40% will be hybrid and 20% will be based on conventional combustion engines.
Currently, only 20% of sales are hybrids and Ferrari doesn’t have an all-electric model. The company expects electric vehicles to account for 5% of sales in 2025 and 40% in 2030. It also develops and manufactures its own electric motors, inverters, and battery units for its electric models.
“I think the internal combustion engine has a lot to offer,” the CEO told Investors. We have to deal with emissions regulations. But most importantly, we see electricity as a means and a technology that can enhance the performance of what we do.
The Italian luxury brand wants to become carbon neutral by the end of the decade. “Everything we do has always focused on being Ferrari,” said the company’s chairman, John Elkann. The combination of opportunities from electricity and electronics allows us to make more unique cars.
Ferrari makes plans for electric cars
Besides ambitions to offer an all-electric model, the company said profits could rise to between 2.5 and 2.7 billion euros this year, from 1.5 billion euros last year. It also aims to achieve profit margins between 38 and 40%, compared to 35% last year.
- Its payments to investors will also rise from 30% of the group’s adjusted net income last year to 35% this year. The automaker also plans to buy back nearly 2 billion euros of stock by 2026.
- The electric car uses technology from the Ferrari racing team, including its electric motor and its understanding of how to reduce power loss.
- Faced with looming bans on fuel-powered cars in Europe and China, major automakers have committed to spending more than $250 billion through 2025 on the transition to electrification.
Like other sports car makers, Ferrari’s Challenge goes beyond the huge investment needed to develop electric models that can match their fuel-fueled predecessors in terms of high performance. Current electric vehicle batteries cannot provide sustainable power for a combustion-engine sports car.
The famous Italian automaker sells an emotional experience for wealthy customers centered around the roar of a powerful engine. Customers love Ferrari cars. This is evidenced by the long order history for cars with prices starting at around €200,000.
On its journey into electric sports cars, Ferrari needs to ensure that its high-net-worth customers and investors share its vision for the future.