Once you consider the following big electric vehicle (EV) stock, you may consider those vying to be the following Tesla, corresponding to Rivian Automotive. Or you may try your luck with a next-generation battery developer, QuantumScape. Or you may keep on with the mainstream autos you already know and mostly love, Ford Motor Company and General Motors.
But you likely would not have considered Ferrari (NYSE: RACE), which actually sold more hybrids within the third quarter of 2024 than it did vehicles with internal combustion engines. Here’s what makes Ferrari probably the greatest stocks to own right because it’s about to kick off its EV strategy.
Once you consider Ferrari, you most likely don’t consider an EV maker. In fairness, Ferrari might be the last automaker that should transition to EVs, as its gasoline models will still sell to eager collectors and consumers. It’d surprise you, nevertheless, that in the course of the third quarter of 2024, 55% of Ferrari’s shipments were hybrids, with internal combustion engine (ICE) vehicles making up the opposite 45%.
And while Ferrari could hang its hat on selling ICE vehicles, the corporate is joining competitors world wide and plans to unveil its first full EV in 2025, with production starting sometime next yr. The kicker with Ferrari is that it is going to likely do immediately what many EV firms wish they might achieve: Earn a profit.
Because of Ferrari’s exclusivity (the corporate essentially only sells a limited variety of vehicles) and brand image, the corporate will find a way to charge a hefty price for its first full EV. While the worth is currently unofficial, speculation is that the brand new model could possibly be priced at around $500,000. And make no mistake, Ferrari would immediately sell out of whatever number it allows to be ordered.
Ferrari’s pricing power is second to none and is an element of the rationale the supercar maker can roll out a near $4 million vehicle, the F80. The F80 is a masterpiece with an engine crafted from Formula One technology and has already sold its order book for next yr. Anthony Dick, who covers the auto sector for the Paris-based private bank ODDO BHF, told Barron’s that the F80 could account for less than 2% of shipments but 20% of total profit. Ferrari’s top and bottom lines will be positively impacted by popular vehicles.
What makes Ferrari probably the greatest stocks to own, nevertheless, goes deeper than the corporate’s flashy supercar design. Thanks partially to Ferrari’s pricing power, the corporate maintains incredible margins in comparison with competitors.