Ferrari CEO Benedetto Vigna Talks China-EU EV Trade

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Well, the conversations that matter, the insights you need. This is a pulse and I'm front Sain Lacua here in London. Now. My next guest is in charge of one of the world's most iconic companies. We're of course talking Ferrari, the luxury carmaker famous for its roaring engine, has started a shift to battery power. Now it's building a factory to make hybrid and electric cars that we'll be ready next month, with the first fully electric model expected late next year.

But I think that you know actification of journey Ferrari started a few years ago, it was the case of Formula one, and it was the case of a supercar. In twenty thirteen, it is the case of four hybrid model actually six if I considered a special version. They are having a tremendous truction on the on the market. Just considering Q one, almost fifty percent of the cars that we sold in Q one are hybrid. So electric electric car is the next step in our road map.

But are you happy?

I think last time we spoke you were talking to me about secret protocols and the secret.

I'm very happy, you're very very happy.

Give us a what are you most happy about?

But I think the car we are we are setting up is a car that is unique in all the respect.

Let's put in this way.

Our electric car just goes beyond the basic electrons and byte that everyone is talking about.

There is much more in a car. But you have to wait till Q four next. I know.

But what is it? Are you replicating sound? Is it the way dry?

We don't like to mimic what is typical of another world. We are interpreting the technology in a unique way. Electric engine is not silent. Electric engine can deliver some emotion that usually in the mass market car that you have today, you don't find it. So it's up to us to interpret this technology in a unique way, to make something unique.

So has it exceeded your expectation? And do you think that will translate into sales.

It's on the way there, it's on the way to exceed. We still have some time. We are on the right track. I'm satisfied where we are. You know, the final judgment is the client. The client is the most important asset for a company because also they are the final judgment.

I think the client will will have well, look at we'll like it.

But we see you already have orders.

Now we don't take orders. We take orders. We take orders only when we launch it. It's the same story of the dot digitial in there we announced a few days ago.

But give me a sense that there there's not this war basically on evs between China and the US and Europe is also in the middle. What does that mean for the electrification of cars in general?

Look, I don't maybe, yes there is. People are defining it as a war. I think for me is a nice competition.

For me. This is a call to action for Europe. It's a call to action.

To become more I can I say pushy, less complacent and if some I've been in my life, I've been always thought that if someone is faster than you, better, you are faster than them. And if you want this is also what we are doing in formula one that I mean in racing, that's what you have to do. If someone is faster, be faster than them, don't try to stop them.

Faster and better and better?

Yeah, sure, because if you're not, I mean, if you're not better, then it's tough.

Right.

Does Europe you think have an actual advantage in.

This faster I mean in any action to let product innovation, call it customer even seeing call it cost leadership. When I say faster to visualize on a track, but in all the directions that make unique a company, in all the directions that if you want to the pillar of a system, a bit of a company.

But you're dealing in supercars, right, I mean, this is like the top of the top of the town. If people buy less electric cars at the kind of base level, does it make a difference to the attractiveness of your cars?

I don't think so. I don't think so. I think that for a company like ours. It's important that we take the three colors, the red, the blue, and the green, and we show the client that we can harness them in a unique way in the river unique emotion. I think that we don't sell allow me to see technologies. We sell emotions and then technology a way to deliver unique emotion to our client.

I mean, of course, this is what you know. Luxury companies sell motions, the desirability. But what kind of client do you think is attracted to the electric for ari.

I think that we will have three kinds of clients. We will have traditional client, some existing ion ferrari that will not take electric cars. Then we will take client existing client that will say, you know what, I will take also electric like I took ibrid and I see. And then there are clients to whom I already talked that are saying, you know, I will be part of your community, of your family, even only if you will

But I mean it's the last one harder to find.

I have to say that I have already met tens of those people that are waiting for our green car.

Allow me to call in this.

Way younger clients or does it or is it more bi regions.

Let's say I would say, yeah, maybe younger than fifty. Yeah, but there are some people in mind between fifteen and sixty that are willing to take this kind of car.

But talk me about so I see what goes you know, what kind of models are you working on?

What happens to that for like ten years?

What I would like to do amongst friends? Yeahah, yeah, I'm sure. I mean to have this kind of question.

We keep going with the plan we share with Captain market day two years ago we said that we'll keep going with the twelve cylinder. We have the eight cylinder thermal, and then we have the six and d eate cylinder library,

How many comings do you already have an idea? Or is ten years too far away?

A little bit far away? Five years?

What I would like to say that you prefer quality of our revenues and our P and L to quantity.

Let's messa in this way.

Fair.

But when you look around the world, you know, we talk about inflation. That's not something that touches a lot of your customers. We talk about those words about geopolitics. Does it impact the demand or does it make the cars more desirable?

We don't see. We did not see any impact on this. I think we have to be watchful. We have to keep always to be watchful to make sure that we are on track.

As so now we don't see an impact.

Clear we are to manage some increase in price and cost of energy and material. We are working on that. But it's the beauty of the life, you know. We have to cope with this situation that you don't know. If you know everything, it's not fun.

It's not fun.

What do you worry about the most?

I think that what is important for us is that one point we are a successful company, a successful team. We need to make sure that we are always with four wheels on the ground. We have always to listen the week signal from the external world. We have to care really about the sustainability like we are doing, and then we don't have to teach.

We have to learn.

I think this is very important because when you are in a successful team, you may lose the compass. You may start to believe that whatever you do you will be successful, and this is not good.

We have to be four wheks.

On the ground, humble. I like that for wheals in the ground. How do you deal with the China strategy? How do you China? How do you deal with China?

For us is we said two years ago China overall China one on Kong, I mean greater China will not go beyond ten percent of our sales.

Why for the caboraries.

One is because the market in China is still not mature.

We need to give time to mature.

And the second because it's a little bit decreative on the margin side for the profit and loss. But really we need for each country we need to give the time to mature. There are other countries sour so that are showing good, good growth, and also there we have to proceed in the right way.

I mean, the China template could be a little bit different to other markets. Right, because there's a crackdown on some luxurious you know brands. So again, how do you see that evolving? Is it like a stop and start?

I would like to say in this way, China is not for Ferrari what it is for other luxury brands. In other cases, you have exposure that is more than twenty percent. In our case it is less than ten percent. It will stay less than ten percent for the reason I told you. For sure, we have also people from that nationality buying outside. But I think they said there are a couple of things I'm particularly proud of the

This weekend Monaco, this is the big one.

Are you worried about the red bull gap getting a little bit smaller?

But I think that this year we are in a better situation than one year ago, because if I see the last seven races, we took seven podium. In one case we took two, in other case we took zero, but we took seven podium. We cut the distance between us and the first one and by factor three versus last year. So I think the team is doing decent process. We are on the on the right track.

So you're confidence for Scuda.

I think there are there have been substantial progresses. We have to keep improving like we like. We have to keep improving in every window. I mean, this is the beauty of life.

This isn't This is a nice philosophy, full stop. Benedetto, as always, thank you so much for joining us. That was Benedetto Vina, the chief executive of Ferrari