Ferrari plans to expand electric car factory in Italy. Subscribe to Electric Vehicle News Bitesize Podcast for FREE!
Ferrari plans to significantly expand its factory in northern Italy as part of its electrification strategy to be revealed at a highly anticipated briefing next week, according to people familiar with the matter.
The supercar maker has grabbed space near its Maranello plant and has begun clearing the way for a third production line that will be dedicated to making hybrid and electric vehicles, people familiar with the matter said. The people asked not to be named because the information is private. The expansion could also include a new battery research and development centre.
Ferrari will highlight the project during its Capital Markets Day on June 16, where CEO Benedetto Vigna is expected to outline Ferrari’s electric vehicle strategy and outline its business plan for the next four years. The former chief executive of STMicroelectronics has been hired to accelerate the move away from the automaker’s famous 12-cylinder engine and four-figure horsepower.
A Ferrari spokesman declined to comment. U.S. shares of the manufacturer were even up 1.3% as of 1:15 p.m. It reversed earlier losses in New York trading on Thursday.
Ferrari had been nurturing one of the world’s most valuable brands long before its 2015 IPO. While the company continues to post enviable profit margins, its stock has underperformed recently, in part due to concerns about its late start in the electric car race and the cost of catching up. The stock is down 22% in Milan this year, lagging the Italian benchmark and European auto peers.
“The focus is on the company’s electrification strategy and how its technology can adapt to a changing world, as well as on its strategy to pursue value over volume and what saturation, if any, they identify,” said Swetha Ramachandran, who manages GAM’s Luxury Brand Equity Fund.
A few months after Vigna, 53, started as CEO, Ferrari changed its organizational structure, bringing in several executives from his former employer and partnering with chipmaker Qualcomm to develop more digital car cockpits. At STMicroelectronics, he led the division that supplies sensors for Apple’s iPhone and the carmaker’s navigation systems.
Huge outlays are likely to be required before Ferrari unveils its first all-electric car in 2025, and Citi analysts said they expected “structurally higher investments to impact returns.” Redburn also warned that investors may be surprised by the scale of the costs required.
“Ferrari has looked a bit less exceptional in recent years, with returns coming off peaks and competitors raising their game,” Jefferies analysts wrote in a May 30 note. The upcoming investor event is “an opportunity to reclaim leadership and better understand why John Elkann appointed outsider Benedetto Vigna, to ‘reinvent’ Ferrari.”
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