What do you think of when you hear the name Ferrari? For most people, what comes to mind is likely very expensive supercars or Formula One racing. Others might think of the roar of an engine or Ferrari’s distinctive logo. However, what most people don’t think of when they think of Ferrari is electric vehicles (EVs). Yet, in a world increasingly moving toward EVs, Ferrari will have to adapt to changing dynamics. Focusing only on internal combustion engine cars is becoming less of a realistic strategy every day. But can Ferrari succeed in the electric vehicle era? In this article, I am going to discuss why I believe Ferrari will be able to succeed with EVs.

Background

Ferrari produces numerous hybrid vehicles, but that is the current extent of their electrification lineup. Ferrari does not currently produce an electric vehicle, but they plan on releasing one in 2025. However, currently, not a great deal is publicly known about their upcoming EV. Therefore, when it comes to specifics about their future EV, we will have to wait until Ferrari reveals more details.

Since designing and producing an EV has very significant differences from producing an internal combustion engine car, Ferrari has decided to work closely with partners. Thus, Ferrari is not planning on having to develop on their own all the technology they will need for an EV.

Prestige and Exclusivity

The biggest reason I believe that Ferrari will be able to succeed with EVs is because of the power of the Ferrari brand. Ferrari’s brand is synonymous with prestige and exclusivity. Many people buy a Ferrari not just because of its technical capabilities or appearance but because of the prestige that comes with owning a Ferrari. Furthermore, Ferrari intentionally limits their production of vehicles in order to keep their brand exclusive.

Ferrari’s prestige has been built over many years and gives Ferrari a significant competitive advantage. Many people grow up dreaming of owning a Ferrari, and Ferrari has a history of success in Formula One racing. Ferrari’s brand has staying power.

Ferrari’s prestige should translate to EVs. While driving a Ferrari EV will be different from driving a Ferrari internal combustion engine car, the cachet of owning a Ferrari will remain. Owning a Ferrari is about more than just the driving experience. The thrill and prestige of owning one of the most exclusive and aspirational cars in the world will continue with a Ferrari EV.

Ferrari does not compete solely on technical abilities. It sells an image, a brand. Similar to how someone may buy a Rolex watch because it is a Rolex, people will want to buy a Ferrari EV because it is a Ferrari.

Due to the incredibly strong brand power of Ferrari, I believe Ferrari will be able to continue to be able to maintain a loyal following of buyers when it starts selling EVs. I believe that the prestige and exclusivity of Ferrari as a brand will carry over to EVs.

Technical Abilities

Range and cost are two of the biggest challenges that many automobile manufacturers currently face when developing EVs. Range anxiety and the price of EVs have caused many consumers to be wary of EVs, and the ability to make EVs that are both affordable and have sufficient range has challenged many automakers. However, unlike most automakers, Ferrari has particular characteristics that will allow the company to largely bypass or overcome these issues.

Batteries are expensive, which drives the price up of EVs. Batteries on average account for around a third of the price of an EV. The high cost of batteries has made it difficult for automakers to make more affordable EVs. In effect, automakers have to spend more to produce EVs due to the high cost of batteries, and subsequently, the end result is higher prices for consumers looking to buy EVs. Kelley Blue Book estimates that in March 2023, the average price of new vehicle in the United States was $48,008 in March 2023 while the average price of an EV was over 22% more, at $58,940. In order to sell more EVs, most automakers need to find a way to make EVs more affordable.

With regards to Ferrari, the cost of batteries is not as significant of an issue. Ferrari doesn’t worry about making vehicles affordable. Ferrari sells high-end luxury sports cars, and hence, Ferrari will not be trying to make an EV which is affordable to the average consumer. Furthermore, Ferrari has a great amount of pricing power, which means that they should be able to raise prices if needed to compensate for the higher manufacturing costs of EVs. Additionally, given the high selling prices of Ferrari vehicles, batteries should be a significantly smaller percentage of total retail price of a Ferrari than compared to the vast majority of EVs. Thus, while many automakers struggle to find ways to make EVs more affordable and compensate for the high costs of batteries, high battery costs are not a significant problem for Ferrari.

Likewise, range is also an issue with regards to EVs. Many consumers want EVs to have long range so as to be able to more conveniently take long trips. Range anxiety is an issue which prevents some consumers from buying an EV.

Automakers have various options to improve range. They can make cars more aerodynamic to improve range, but that can negatively impact functionality for SUVs, particularly when many consumers choose SUVs for their generous interior space. Automakers can add more batteries to boost range, but that means adding more costs. Alternatively, automakers can use lighter weight materials to construct vehicles, but that also can add costs and reduce affordability.

Ferrari is not completely immune to range anxiety, but range anxiety will likely not be a major issue for Ferrari. To begin with, most Ferrari owners likely do not take their cars on long trips. Due to the very limited space inside many Ferrari cars, Ferraris are typically not the most practical vehicles with regards to long trips. Ferraris, rather, are the type of car someone drives around town in, a car to be enjoyed on a beautiful sunny day. Therefore, Ferraris do not need to have the most range on the market, as most Ferrari owners likely will not be concerned about taking their Ferraris on long trips.

Additionally, when building EVs, Ferrari can use lightweight materials and focus significantly on aerodynamics in order to boost range. Unlike many other automakers, Ferrari can easily afford to use more expensive lightweight materials since affordability is not a concern for Ferrari cars. Likewise, since Ferrari does not make large SUVs and trucks, Ferrari can completely avoid the types of vehicles that are the most range challenged. Rather, Ferrari can focus on making sports cars with excellent aerodynamics, a key component in boosting range.

Conclusion

Ferrari is a unique company, very distinct from most automakers. The future for Ferrari will likely be both very different and much the same as its past. Unlike the past, the EV era has arrived, and Ferrari is going to have to adapt. However, similar to the past, the prestige and exclusivity of Ferrari’s brand will help it to succeed with EVs.

I believe that Ferrari will be able to succeed in the EV era. Ferrari’s strengths should largely carry over to EVs. It will be interesting to see what Ferrari’s first EV is actually like.

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