Ferrari blinks on EVs — growth reset or smart brand protection?

• Ferrari cut its 2030 EV mix goal to 20% and guided to slower profit growth; shares fell sharply.

• Financial targets still imply best-in-class margins (EBIT ≥30%, EBITDA ≥40%) and strong FCF, but at a lower growth cadence.

• Strategy leans into scarcity, hybrids and capital returns; I think that’s rational for the brand, but it warrants a lower multiple than “hyper-growth luxury tech”.

What happened

On 9 October 2025 Ferrari halved its 2030 fully-electric mix target (to 20% from 40%) and set new 2030 goals that underwhelmed the market, sending the shares down about 15% intraday. Management also previewed the Elettrica (first EV), with deliveries slated from late 2026.

Context & data

• 2030 financial framework: revenue around €9bn; EBIT at least €2.75bn (≥30% margin); EBITDA at least €3.6bn (≥40% margin). Between 2026 and 2030, cumulative industrial free cash flow about €8bn vs capex around €4.7bn; dividend payout rising to 40% (from 35%) plus a new €3.5bn buyback over 2026–30.

• Product & powertrain mix: 2030 split now 40% ICE / 40% hybrid / 20% EV; plan to launch roughly four new models a year during 2026–30.

• Near-term guide: 2025 revenue at least €7.1bn. The announcement day saw shares halted and double-digit declines.

• Hybrids today: hybrids were 49% of shipments in Q1 2025 and 45% in Q2 2025 (about 47% across H1), consistent with Ferrari’s “bridge” to electrification.

• Tech note: Elettrica’s battery targets roughly 195 Wh/kg and 800V architecture; Ferrari keeps emphasising “thrill parity” versus ICE/hybrids rather than chasing a halo EV supercar immediately.

• Policy backdrop: Europe’s 2035 ICE phase-out remains under review; industry groups are lobbying Brussels for a looser path (e-fuels, credits), which implicitly favours Ferrari’s higher ICE/hybrid mix through 2030.

My take

I read this as a pragmatic brand-first pivot, not a demand capitulation. Ferrari is optimising for experience, ASP and residuals, not EV unit share. The reset trims the top-down TAM narrative (fully-electric super-luxury still looks niche) but preserves the core moat: scarcity, order-book visibility, personalisation, and racing-led halo effects. Hybrids already sit near half of shipments with strong mix benefits, and the 2030 model cadence supports pricing power without volume bloat.

From a valuation lens, the market had priced Ferrari like a structural outlier (luxury multiple on a tech-adjacent auto story). With revenue CAGR now around 5% and EBIT CAGR around 6% to 2030, the quality is still exceptional (EBIT ≥30%, FCF about €8bn over 2026–30; healthy cash conversion), but the growth “beat-and-raise” playbook is cooler. If the multiple compresses, I’d frame the long case around (i) durability of >30% EBIT, (ii) discipline on volumes and model cycles, (iii) capital returns (40% payout plus buyback), and (iv) optionality from Lifestyle/Racing monetisation — not around EV hyper-scaling.

Risks & watch-list

• Execution: EV build ramp and electric driving-feel parity; any slippage risks margin dilution and brand equity.

• Policy & trade: EU 2035 rules and any U.S. tariff shifts can swing mix, pricing and capex allocation.

• Demand mix: Ultra-high-end EV willingness to pay remains unproven; a tepid Elettrica could pressure the narrative.

• Residual values: Personalisation is high-margin today; if residuals weaken, that could hit LTV/brand scarcity.