Will the Ferrari brand appeal when it's all-electric?
At a $500K+ price point, it had better.
The charging horse
As arguably the most iconic luxury car company in the world, Ferrari’s foray into the world of electric supercars has been keenly anticipated. It’s also been highly secretive. But, some details did emerge this week from Reuters that Ferrari’s first electric effort will start at a hefty €500,000 ($535,000) — well above the company’s current average selling price of ~€350,000. The first Prancing Horse EV is expected in late 2025 and a second model is already in development.
For Ferrari, whose brand depends so greatly on the “noise factor” of its highly-romanticized cars, the move to quiet electric is potentially more risky than it is for other brands.
Unlike mass-market automakers, Ferrari's margins rival luxury titans like LVMH and Hermès, having posted a 27% operating profit margin last year. In contrast, VW and Mitsubishi hover around a 7% margin, Ford is close to 3%, and even rival Porsche only aims for 20%. At the rumored price tags, those margins seem likely to stay intact — the challenge will be in scaling production. Ferrari delivered only ~14,000 cars in 2023, but it has plans to ramp capacity up to as much as 20,000 a year to accommodate the new EV models.
While selling cars and parts is its main business, Ferrari also made $600M+ in sponsorship, commercial, and branding revenue last year bolstered by a strong Formula 1 performance.
