Focus: Ferrari to churn out gas guzzlers on its slow road to electric

Pininfarina SpA

30/06/2022 07:00

By Giulio Piovaccari and Nick Carey
    MARANELLO, Italy, June 30 (Reuters) - Ferrari  RACE.MI 
makes some of the fastest cars on the road, but the luxury
Italian automaker is taking the slow lane to an electric future
as it tries to overcome the technology's disadvantages against
today's powerful fossil fuel engines.
    At an investor day this month, executives promised a new
era, with the first fully electric Ferrari in 2025.  urn:newsml:reuters.com:*:nL1N2Y30IL
    But for now, combustion engines remain the noisy heart of
what it does. Unlike some rivals, Ferrari has not provided a
roadmap for going all electric. Volkswagen's  VOWG_p.DE  Bentley
brand and Volvo  VOLCARb.ST  are both targeting 2030.
    According to a source familiar with Ferrari's business
plans, a new production line focused on electric vehicles (EVs)
should help lift annual production at its plant in Maranello,
Italy, by more than 35% to over 15,000 cars by 2025 versus
11,155 in 2021 – or 65 cars per day versus 46 currently -
delivering higher profit margins in the process.
    Ferrari declined to comment. 
    The carmaker has told investors it is targeting a core
profit (EBITDA) margin of 38-40% in 2026, versus 35.9% in 2021.
    Its line-up could also grow to at least 17 models by 2026
from 12 today. But most new models will, at least initially,
have a combustion engine - including its first SUV, the
Purosangue, powered by its trademark huge 12-cylinder engine - 
though some may be hybrids. 
    Ferrari currently has four plug-in hybrids in its line-up. 
    
    
    A zero-emission future poses the same challenges for Ferrari
as it does for rivals - EV batteries weigh hundreds of
kilograms, which affects aerodynamics and handling, and can't
match the sustained power and throaty roar of a massive
combustion engine.
    To solve those expensive challenges, Ferrari is researching
solid state batteries, which could theoretically improve battery
power, as well as hydrogen fuel cells and synthetic fuels, both
of which face an uncertain future.
    European Union countries agreed this week to an effective
ban on new fossil-fuel car sales, but will assess in 2026
whether hybrid vehicles and synthetic, or CO2-neutral, fuels
could comply with that goal.  urn:newsml:reuters.com:*:nL1N2YG0D3
    "In every case where you have a technology transition, by
definition you have a situation which is a little bit fuzzy,
there is some fog," Ferrari CEO Benedetto Vigna, a technology
industry veteran who took over in September, told Reuters.
    Jefferies analyst Philippe Houchois describes Ferrari's
approach as "measured", but adds that may not be popular with
investors as some automakers charge towards an electric future. 
    "They can run their profit center with combustion engines
longer and amortize their investment there," he said. "But it's
not necessarily what the market wants to hear because the
mindset is let's rush into EVs and never look back."
     
    AN ELECTRIC MARRIAGE?
    Every 22 minutes on the V8 assembly line at Maranello a
finished engine and chassis come together, which Ferrari calls a
"marriage." 
    For an undisclosed sum, the engine with a V12 model includes
a plate bearing the name of the worker who made it. 
    Ferrari executives highlight the emotion some drivers feel
when they buy one of their cars, that start at over 200,000
euros ($212,000).  
    "I see customers coming to take their cars and some of them
are crying," Vigna told Reuters. 
    So it's crucial for Ferrari to create a similarly passionate
response to its EVs. 
    Hybrid sports cars have been a success, pairing powerful
engines with the instant acceleration of an electric motor.
    But fully-electric sports cars currently have a weight
problem because of the huge batteries needed to provide enough
power.
    Croat hypercar maker Rimac's Nevera, for instance, weighs
2,200 kg (4,850 lb), more than fossil-fuel sports cars and
heavier even than Ford Transit and Mercedes Sprinter vans.
    That enormous weight "in turn affects performance, driving
dynamics and experience", said Dario Duse, managing director at
consultancy firm AlixPartners.
    Ferrari is not alone in facing these challenges, and few
ultra-luxury rivals are rushing to go electric.  
    Lamborghini, for instance, doesn't plan a fully-electric car
until the end of the decade.  urn:newsml:reuters.com:*:nL8N2U523G 
    But, according to AlixPartners' Duse, Ferrari must weigh its
options more carefully than Lamborghini, which has a
deep-pocketed owner in world No.2 carmaker Volkswagen (VW).
    "For Ferrari, which unlike Lamborghini does not have access
to a development platform like that of VW, the issue of
investments is also certainly relevant," Duse said.
       
    HYDROGEN TO THE RESCUE?
    Among its options, Ferrari is researching hydrogen fuel
cells, a future zero-emission solution touted by Japan's
carmakers and the likes of BMW  BMWG.DE  in Europe that can
match the sustained power of combustion engines. 
    British startup Viritech is already building a hydrogen
hypercar, with input from Italian auto design house Pininfarina
 PNNI.MI , a limited-edition vehicle weighing 1,000 kg that it
aims to use to sell the technology to carmakers. 
    CEO Timothy Lyons says over the last 18 months Viritech has
seen a "huge spike in interest" from conventional carmakers in
the concept. 
    But hydrogen fuel cell cars need infrastructure for
producing "green" hydrogen using renewable energy and fuelling
stations, which are unlikely to be in place until the 2030s.
    Vigna said Ferrari is also working with four partners in
Europe and Asia on battery components to research the next
generation of high energy density solid state batteries, which
are lighter than today's cells. 
    Carmakers such as Ford  F.N  and BMW have invested in solid
state batteries, but the technology is still some years away
from use in cars.
    "Solid state batteries are turning into a bit like the
hydrogen story in that it's a fuel of the future," Jefferies
Houchois said. 
    He warned Ferrari's slow pace of change could be seen as
dragging its feet, or even "socially wrong".
    "But from a business standpoint, they've got a great
business and it doesn't have to go away that quickly," he added.
    "They're avoiding excessive commitments that they can get to
a certain point by a certain date at a certain price because
they don't know." 
    ($1 = 0.9445 euros)

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ferrari's rising volumes    https://tmsnrt.rs/3QT1FpC
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 (Reporting by Nick Carey and Giulio Piovaccari
Additional reporting by Sara Rossi
Editing by Mark Potter)
 ((nick.carey@thomsonreuters.com; +44 7385 414 954;))