Ferrari welcomes European ban on fuel cars from 2035

Europe recently announced to ban petrol and diesel-powered cars from 2035. Ferrari Chairman and acting CEO John Elkann may seem to feel confident about this change. He said, “We see the regulation as welcome. The opportunity set by electrification, electronics and other technologies that are coming available will allow us to make even more distinct and unique products,”

Fiat Chrysler's john Elkann maintains family support
Image credits- The Australian

Despite having technology, major automakers find it a challenge to keep up with rigorous targets amidst an increase in supply chain demand. Ferrari’s positive perspective comes after they announced second-quarter core profits this year. The company stuck to its targets and plans to continue the same in the coming years.

Adjusted core earnings were tripled in the second quarter. Reported to 386 million euros ($458 million). The forecasted earnings are 373 million euros. Additionally, the automaker increased industrial free cash flow guidance to 450 million euros this year from 350 million euros. By 2025, Ferrari plans to launch its fully electric vehicle.

Elkann said, “We believe that within the industry and more importantly, outside of our industry, we are going to benefit much from partnerships and joint programs”.

Adjusting expenditure

In May, Ferrari announced its plans to adjust expenditure this year. In response to the post-COVID situation, their expenditure adjustment was extended to next year. As said by Elkann, “We expect the prudent steps we took in 2020 and are continuing in 2021 to adjust our expenditure in response to the COVID-19 emergency will postpone by one year the achievement of our year-end 2022 guidance,”

The luxury brand is also going to diversity its profile apart from Formula One-related activities. However, Milan-based traders said that the impact due to COVID is much greater than anticipated. After Ferrari’s Q2 results, shares fell by 3.45% in Milan and closed down at 1.9%. Citi analysts raised concerns about Ferrari reaching margins in the coming months this year.

However, Elkann said in May, “Our 2022 results will be better than 2021, which … we believe will be very strong. It leaves plenty of room for new management to discuss the potential beyond 2023 including an expanded model range,” Elkann continued this prediction after Ferrari’s Q2 report announcement.

Ferrari is welcoming European ban on field-based cars. Aligning with the carbon emission goals will ensure Ferrari is electrified. Automobile companies are competing to electrify as early as possible. Alongside government is pushing for rigorous goals, with plans to install charging stations and other infrastructure in the coming years. Ferrari is going futuristic despite the risks.