While electric vehicle (EV) startups that once seemed promising saw their stock prices plummet far faster than the rest of the market, Ferrari managed to stay ahead of other automakers as the industry retracted, and is poised to post the smallest decline amongst major automakers in 2022, CNBC reported Wednesday.
The FactSet Automotive Index, a measure of the economic health of the auto industry, is down nearly 39% year-to-date at time of writing, whereas Ferrari’s stock is only down about 19% trading at roughly $210 per share, according to Google Finance.
With just a few days left in the year, Ferrari was well ahead of traditional automakers such as General Motors and Ford, who were each down more than 45% this year, and left EV-focused startups in the dust, according to CNBC.
EV startups Rivian, Lucid and Canoo all posted losses of more than 80% year-to-date, while competitor Nikola saw shares fall nearly 78%, according to Google Finance.
Other mainstream brands, such as Dodge-maker Stellantis, and Toyota saw declines of nearly 30% year-to-date, weathering 2022 without the production and liquidity issues that startups struggled with this year, according to CNBC.
Tesla, perhaps the most high-profile EV maker in the U.S., is down roughly 70% year-to-date, losing nearly 20% in the week ending Dec. 23 after CEO Elon Musk spooked investors by selling around $3.5 billion worth of shares.
While some investors are concerned that Musk is spending too much time managing Twitter, the social media platform he acquired in October, Musk blames heightened interest rates set by the Federal Reserve to combat inflation for weakening the stock market.
Elevated interest rates have also made car loans more expensive, helping push demand for new vehicles down as 2023 approaches, S&P Global Mobility reported. To spur demand, companies may be forced to cut prices, hurting profits and further damaging their value in the eyes of shareholders.
Ferrari, meanwhile, expects demand will continue to be strong, including for its first-ever SUV, the Purosangue, which will be launched next year, CNBC reported. Although the car starts at $400,000 in the U.S. — well above Ferrari’s average selling price of $322,000 — the company was forced to pause new orders after it received orders for two years’ worth of production.
“[Ferrari’s] focus on the unique quality and performance of its vehicles is unwavering, and has driven a track record of resilient financial performance, as well as significant intangible brand value and a true luxury status,” wrote John Murphy, a Bank of America securities analyst in a Dec. 13 note to investors, according to CNBC. Murphy recommended that investors buy Ferrari, estimating that the stock would be fairly valued at $285 per share.
Ferrari is set to produce its first EV in 2025, and anticipates 40% of its cars will be fully electric by 2030, while 80% will be electrified in some capacity by the same time, according to Forbes. Despite this, Ferrari still intends to improve upon its combustion engine models.
“I believe that the internal combustion engine has a lot to give,” CEO Bendetto Vigna told investors in June, Forbes reported.