Exor Reaffirms Auto Love, Eyes Ferrari EV Future

Key Takeaway

• Exor NV, owning significant stakes in Ferrari and Stellantis, emphasizes its commitment to the automotive sector despite diversification.
• Ferrari is advancing into electric vehicles, partnering with SK On for battery development and planning its first electric car launch next year.
• Despite broadening into various sectors, Exor's strategic investments reflect a focus on long-term value and industry growth potential.

Exor's Automotive Affection

Exor NV, under the leadership of CEO John Elkann, reaffirms its commitment to the automotive sector, with super-car maker Ferrari NV and Jeep-maker Stellantis NV being its largest assets. Despite a broad diversification strategy that has seen Exor venture into healthcare, technology, financial services, and luxury, nearly 60% of its gross asset value last year was attributed to Ferrari and Stellantis. These companies saw their value increase by 52% and 59% respectively, contributing a combined €8.2 billion ($8.8 billion) to Exor's portfolio. This enduring love for the automotive industry underscores Exor's strategic positioning and its confidence in the sector's growth potential.

Diversification and Strategic Investments

Beyond its core automotive interests, Exor has expanded its investment portfolio to include significant stakes in various sectors. The holding controls entities such as Juventus Football Club SpA and The Economist Group, and has a notable investment in Koninklijke Philips NV. In a recent move, Exor partnered to acquire a stake in the women’s fashion brand Subdued, signaling its intent to diversify further. Despite these ventures, Exor's support for Philips' leadership and strategy indicates a strategic approach to its investments, focusing on sectors where it sees long-term value and alignment with its broader objectives.

Ferrari's Electric Venture

Ferrari is embarking on a significant transition towards electric vehicles (EVs), partnering with South Korea's SK On to develop batteries for its future electric supercars. This move marks a pivotal shift for Ferrari, known for its high-performance combustion engines, towards embracing electrification. The construction of a new EV factory in northern Italy, expected to be operational by June, highlights the operational and financial challenges inherent in such a strategic pivot. Ferrari's commitment to electrification, including plans to unveil its first fully electric car in the fourth quarter of next year, reflects the company's adaptation to the evolving automotive landscape.

Market Challenges and Skepticism

Despite Ferrari's strategic efforts to transition into the electric vehicle market, the company faces skepticism regarding its ability to maintain its iconic status in a highly competitive EV sector. The partnership with SK On, while leveraging shared expertise in cell technology, introduces Ferrari to new operational hurdles and market dynamics. The automotive industry's rapid shift towards electrification presents both opportunities and challenges for Ferrari, as it navigates maintaining its luxury brand appeal amidst evolving consumer preferences and technological advancements.

Management Quotes

• John Elkann, CEO of Exor:

  "Ferrari and Stellantis rose in value by 52% and 59% respectively last year, with a combined increase of €8.2 billion ($8.8 billion)." "Exor is fully supportive of Philips’ leadership and strategy, and the holding sees the stake as a good fit for its healthcare portfolio."

• Carlos Tavares, CEO of Stellantis:

  "The group may have to make “unpopular decisions” if the government entices a Chinese electric vehicle manufacturer to set up shop in Italy."