Has Ferrari Lost Its Mind?
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Can Ferrari go all electric? Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoy. I'm joined today by Lou Whiteman and Matt Frankel. And guys, one of the big items over the weekend that I think we got to start with is Ferrari introducing their all electric Luce, if I'm saying that correctly. correctly. We have a pizza luche down the street from me. Probably not related, but this is something that we've seen at least the guts of. Johnny Ives' company, Love From, designed some of the internals, so we saw a little bit of that, but we actually saw the outside The reaction from the media, from, you know, influencers and people like that, Matt, was not all that positive.
So what do you think about Ferrari making this step into the EV space?
I mean, I could have told you before they made this product announcement that the market was going to react negatively. It's going to be really tough. for Ferrari to differentiate itself in the EV space.
What is the significance of Ferrari's new electric model, Luce?
The company's own executives seem to think that this is the future of the company, and I don't buy it. People buy Ferraris for specific reasons. One, they sound different than every other car on the road. They have race car-like handling, which is almost impossible with an EV because your batteries weigh 2,000 pounds. I mean, there's a lot. People who buy Ferraris don't care about being able to drive 3,000 miles in a clip. The average Ferrari goes about 2,000 miles a year.
Yeah, they're not actually for driving as much as they're probably very fun to drive. I've driven one once, but they are more of kind of a showcase than anything else.
Yeah, I think I was there when you drove your Ferrari. Yes, that's right. And being able to carry five passengers in their luggage. No one buys a Ferrari for that, especially a $600,000 upscale version. And with EVs, being able to do zero to 60 in two and a half seconds is not a differentiator. You could do that with a Tesla Model S Plaid for one-fifth of the price, less if you buy one used. It's not as much of a differentiator as it is when you're buying a sports car. A Ferrari sports car is noticeably faster than a Camaro. It's not noticeably faster than my wife's Cadillac EV because it has instant power delivery. So I feel like the market's reaction is correct in that the EV focus is a bit of a misstep for Ferrari.
The plug-in hybrid they released not long ago was a big success. And I think that's really the direction they're going to end up going.
Yeah, Lou, what's so interesting about this is the design is so different than most Ferraris. And we've seen this before. If you remember Porsche, when they came out with their SUVs, that was actually a huge success for them financially that arguably saved the company. But this one almost seems to go a little further in that direction. I said in our show notes that it reminds me of Apple's unapologetically plastic iPhones. It kind of has that sheen to it. So it just seems like it's so far off. that that's what's throwing people off. That all said, I still kind of like it.
Yeah, you know, Matt saw this reaction coming. I didn't, because to be honest, I'm surprised investors care. This to me feels like a placeholder. You're a European automaker. You're an automaker in general, but especially a European automaker. You have to have something in this segment, period. Just so the politicians don't bug you when you call them up. I don't think this is a needle mover. If they really want to move the needle, they should start fulfilling some of their wait list, which has been their problem.
What challenges does Ferrari face in the EV market?
But look, I'm not going to say that there isn't a market for five passengers with luggage. I wouldn't have thought the Porsche Cayenne would work either. There are people who will pay ridiculous amounts to brag about what they're really when they're just buying a. And Cayenne kind of looks like the Kia, if you ask me, in a lot of ways. But, you know, so there is always a market out there for this, maybe. But for the most part, you know, they're not trying to differentiate there.
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