Ferrari Hybrid Sales Surpassed Petrol Models in Q3 2023 as it Moves Closer to its First Pure EV

Ferrari Q3 2023 Results

The iconic Italian automaker delivered another blockbuster report on Thursday. Revenues rose 24% y/y in the third quarter, to a record €1.544 billion and Adjusted EBITDA (profits before interest, taxes, depreciation, and amortization) increased 37% y/y to €595 million. The results were largely driven by higher sales, higher prices, richer product mix and personalization options, which add thousands in the final price tag. More to it, executives upgraded the full 2023 guidance again, now expecting sales of €5.9 billion and Adjusted EBITDA over €2.5 billion (from 5.8 bln and 2.19-2.22 bln previous estimates respectively). [1]

Ferrari (RACE.it) shipped 3,459 vehicles in Q3, up 9% y/y, with CEO Benedetto Vigna speaking of "strong demand" across all regions and an order book that covers the next two years. The increase was partly attributed to the "ramp up" of the firm's first SUV, the Purosangue, deliveries of which begun in the previous quarter.

The storied auto manufacturer offers four hybrid models, against nine internal combustion engine (ICE). In an important shift though, hybrids surpassed the ICE models for the first time, accounting for 51% of total sales. Ferrari is definitely not at the forefront of electrification, with rival Porsche (of the Volkswagen Group) for example, selling its Taycan full EV for years now.

However, the Q3 delivery breakdown shows progress toward fully electric cars. Europe is Ferrari's biggest destination, but also the second largest electric market behind China. This is likely going to be a challenging transition for a company known for its racing heritage and the exciting sound of its petrol engines, but with the EU Commission ban of ICE sales by 2035, there is not much of an option. [2]

Ferrari (RACE.it) is set to unveil its first fully electric car in 2025 and the CEO confirmed during last week's earnings call that the plan is on track. According to June's Strategic Plan, the company's line up by 2026 will be 40% ICE and 60% hybrid and full electric [3]. Rival Italian supercar maker Lamborghini is likely to start shipping its first hybrid next year, while the first pure EV is planned for 2028. [4]

The move comes at challenging period for EVs, as demand is dented by elevated inflation that puts upwards pressure to prices, high interest rates that makes financing much more expensive, range anxiety and other factors. The EV king Tesla Motors Inc has been slashing prices over the past several months to mitigate the issue, but deliveries still fell nearly 7% q/q in the third quarter.

Ferrari does not face demand issues, but attracting new clientele outside its traditional base is always good and partly towards this end, it recently announced it will accept crypto payments according to Reuters. It will accept Bitcoin, Ether and stablecoin USDC, starting with the US and expand to Europe at a later stage [5]. It has sold 2,972 vehicles in the Americas during the first nine months of the year (including USA, Canada, Mexico, the Caribbean and Central and South America).

Markets reacted positively to Thursday's strong results by Ferrari and the updated guidance. RACE.it overcame the poor Q3 and extended this year's rally, jumped to new record highs after the release.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 07 Nov 2023 https://www.ferrari.com/en-EN/corporate/articles/another-record-quarter-sustaining-upward-revised-year-end-outlook

2

Retrieved 07 Nov 2023 https://www.europarl.europa.eu/news/en/press-room/20230210IPR74715/fit-for-55-zero-co2-emissions-for-new-cars-and-vans-in-2035

3

Retrieved 07 Nov 2023 https://cdn.ferrari.com/cms/network/media/pdf/2022.06.16_Ferrari_press release Capital Markets Day 2022-1.pdf

4

Retrieved 07 Nov 2023 https://www.lamborghini.com/en-en/news/lamborghini-unveils-the-lanzador-future-electric-emotion

5

Retrieved 25 Jun 2024 https://www.reuters.com/business/autos-transportation/ferrari-accept-crypto-payment-its-cars-us-2023-10-14/

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