Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.

I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us.

This week, Ferrari have released a world of firsts: the first-ever electric Ferrari, the brand’s first 5 passenger sedan, AND the first car designed by legendary Apple designer Jony Ive.

The controversial Luce — the first Ferrari model to be fully electric and to have five seats — immediately sparked outrage among purists in Italy.

It also didn’t immediately convince investors, with Ferrari’s stock dropping by more than eight percent on Tuesday, wiping out more than $5 billion from the market cap of Europe’s most valuable automaker.

When the Luce was first announced in 2021, enthusiasm around EVs was reaching a crescendo. Now, the market looks different: U.S. consumers have cooled on the technology, Chinese manufacturers have raced to dominate the market, and European carmakers have stomached tens of billions in write-downs after overcommitting to the segment.

The four-door Ferrari, branded as “the most comfortable Ferrari ever” — hardly an on-brand endorsement for a carmaker synonymous with speed, style and passion — was co-designed by Jony Ive, the former chief design officer at Apple. 

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For Ferrari, the car represents a lot of firsts—its first all-electric powertrain, its first five-seater vehicle and its first production car to carry a price tag above $600,000. It also abandoned its typical modus operandi by bringing in former Apple designer Jony Ive and his team, instead of relying solely on Ferrari’s in-house crew. 

Some jokingly noted a resemblance between the new Ferrari, available in an unusual light blue, and the iconic Apple products designed by Ive’s team.

And pretty much everyone seems to be mad about Ferrari’s first electric vehicle. 

While it ticks a lot of spec sheet boxes — it boasts 1,000 horsepower and the ability to hit 60 miles per hour in just over two seconds — it’s tracking to be the most mocked new vehicle since the Cybertruck.

The Luce, named after the Italian word for “light”, is expected to begin deliveries in the fourth quarter. It is ​aimed at new markets, including ​China, where electric vehicles account ⁠for a growing share of premium car sales.

So has Ferrari really missed the mark?

Remember that Ferrari only produces approximately 13,000 to 14,000 cars per year. The luxury automaker intentionally limits its production volumes to preserve brand exclusivity, scarcity, and prestige. In fact, since their inception in 1947, they have only produced about 330,000 vehicles in total. The company’s famous philosophy is to always build “one car less than the market demands”.

Many Ferrari collectors and purists have disliked the company’s hybrids, viewing them as a departure from the brand’s pure combustion heritage.

Collectors prioritize the traditional Ferrari experience: the visceral vibration, manual transmissions, and the iconic, naturally aspirated exhaust notes of a V8 or V12 engine. For this crowd, electric motors and V6 plug-ins dilute the legendary soul of the brand. 

On the flip side, models like the SF90 and the 296 use hybrid powertrains to achieve over 800-1000 horsepower. They deliver instant torque and devastating track times that traditional engines simply cannot match on their own.

But, collectors are famously hesitant regarding the resale value of electrified supercars. The highly complex hybrid systems and heavy batteries often translate into intimidating maintenance and repair costs, leading to steep depreciation in the secondary market compared to naturally aspirated models.

There is another question that may also impact demand and thus resale value in the collectors’ aftermarket. With the small production numbers, what if an electric Ferrari stops receiving software support after 10 years? What happens to its collectability and value if you can’t start and operate these cars?

The question underneath all of this immediate backlash is singular: Who is the Luce for? Remember that The Luce will cost around $650,000.

Is it for existing Ferrari owners? Typically, that answer is yes — more than 80% of the 14,000 people who bought a Ferrari last year already own one of its vehicles. It’s hard to imagine that crowd being sufficiently excited about a car that is so devoid of the fierce Ferrari angles that have adorned bedroom walls for decades.

Ferrari handles its sales and access to the most elusive models based on customer loyalty and prior purchases. Others will want it simply to complete their collections.

Ferrari is also targeting a new generation of wealthy buyers, including technology-sector entrepreneurs in hubs such as Silicon Valley, as it seeks to ​broaden its appeal beyond its traditional customer base.

Ferrari’s main target with the Luce is someone who “already owns an electric car.” By definition, that likely means Ferrari isn’t looking at current owners to make up the bulk of Luce sales.

So, then we look to the growing affluent class in China. While Chinese buyers have typically only made up around 10% of Ferrari’s overall sales, those numbers have declined in recent years, and the automaker’s executives haven’t been shy about wanting their first EV to turn things around in the largest market for battery-powered vehicles in the world. 

So the question is: will Chinese buyers, who are currently awash in high-performance, high-tech, affordable options, care to pay up for the prestige of a prancing horse on the hood?

The frosty market reaction underscores the risks facing Ferrari as it attempts to preserve exclusivity and pricing ⁠power while ​navigating a broader industry shift towards electrification.

Luxury automakers continue to face uncertainty ​over demand for high-end EVs. Ferrari last year postponed plans for a second electric model until at least 2028.

My perspective?

Ferrari should stick to the big displacement internal combustion engine and manual transmission DNA that has brought it to greatness. Rolex shouldn’t create a digital watch, and Ferrari shouldn’t build EVs. But that’s just my opinion.

If nothing else, the new electric Ferrari proves the Apple Car that we waited on for a decade, but never came, would have been really, really nice.

So, with that, let’s transition to Our Companies to Watch.

Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and take the opportunity here on this segment each week to share that company with you.

Today, our new company to watch is Dealerware.

Dealerware is the only solution in the industry that manages all dealership fleets and programs on one platform with one mobile app.

By recovering fuel and toll expenses and charging daily rates, dealers utilizing Dealerware+ achieve expense offsets that matter.

With automated tasks, intuitive workflows and a mobile-first approach Dealerware+ makes managing your fleet and delighting customers the easiest part of your day.

If you’d like to learn more about Dealerware, you can check them out at: www.dealerware.com

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So that’s it for this week’s Future of Automotive segment.

If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our new Mobility Fund.

Don’t forget to check out my two books, The Future of Automotive Retail and The Future of Mobility, both available on Amazon.com.

Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!