Ferrari to expand electric car production at northern Italy plant

Ferrari plans to significantly expand its factory in northern Italy as part of the company's electrification strategy, according to people familiar with the matter.

Ferrari has bought land near its Maranello plant to build a third production line that will be dedicated to producing hybrid andelectric vehicles, said the people, who asked not to be identified as the matter is .The expansion project may also include a new battery research and development center, sources said.

Ferrari will announce the project at its Capital Markets Day on June 16, when CEO Benedetto Vigna is also expected to unveil Ferrari's electric vehicle strategy and present its business plan for the next four years.Ferrari had hired Vigna, a former STMicroelectronics executive, to lead Ferrari's acceleratedelectrificationtransformation.A Ferrari spokesman declined to comment.

Image credit: Ferrari

A few months after Vigna, 53, started as chief executive, Ferrari restructured its organization. Vigna poached several executives from its former employer and worked with chipmaker Qualcomm on the development of a digital car cockpit. .During his tenure at STMicroelectronics, he led a division that supplied sensors for Apple and automakers' navigation systems.

Ferrari became one of the most valuable car brands in the world before its IPO in 2015.Despite the company's enviable profit margins, its stock has underperformed recently, in part because of investor concerns that the company's late start in the electric-vehicle race could be costly in the future.Shares in the company have fallen 22 percent this year, lagging Italy's benchmark and other European automakers.

Ferrari is expected to release its first pure electric car in 2025, and the company will likely need to spend a lot until then.Analysts at Citibank said they expected "structurally high investment to impact returns".Redburn also warned that the scale of Ferrari's spending could surprise investors.