Ferrari: sports car maker plays catch-up in electric vehicles

Formula One driver Charles Leclerc may want to take a few more laps around the practice track instead of the catwalk. Modelling clothes at Ferrari’s inaugural fashion show is all well and good but his team has not won a race for two seasons. The world’s premier sports car maker faces accusations that style has overtaken substance. 

Lagging behind rivals in electrification does not help. The launch of its new plug-in hybrid electric 296 GTB on Friday shows that efforts here are accelerating. Even so, Ferrari does not expect to have a fully electric model until 2025.

Incoming chief executive Benedetto Vigna must pick up the pace. Efforts to better exploit Ferrari’s brand through fashion and other marketing activities led many to expect a CEO with a luxury goods background. But physicist Vigna cut his teeth at chipmaker STMicroelectronics, building the company’s sensor business into its biggest and most profitable division. That should stand him in good stead to oversee technological changes sweeping the auto industry. 

Lack of fully electric vehicles does not concern Ferrari customers yet. Chinese demand meant that order books in the first quarter reached a record level, including strong bookings for its PHEV SF90 Stradales. But there have been setbacks. Ferrari said in May that its former 2022 earnings expectations would come a year later due to pandemic disruption. Slower investment will mean fewer new models are ready in time.

Any disappointment is compounded by excitement at larger manufacturers such as VW and Daimler, where electric vehicle projects gather pace. Shares in the two German manufacturers have risen 67 and 35 per cent respectively this year. Ferrari shares have slipped more than a tenth. At 22 times expected ebitda the valuation has drifted back to 2019 levels. 

But car electrification remains in its infancy. Ferrari has time to catch up to its peers after Vigna starts in September. New rules and new cars at next year’s Formula One championship should mean driver Leclerc gets the same opportunity.