£315,000 Ferrari supercars growl a warning for EVs

Part of the reason Ferrari NV’s wealthy customers are happy to fork out almost half a million pounds for a supercar is they expect these stunning vehicles to retain their value, or even appreciate, making ownership almost free. However, at least one of the prancing horse’s most iconic models — the plug-in hybrid SF90 Stradale — is depreciating rapidly, in some cases losing around 30% after just three years on the road, according to examples I found on UK listings site Auto Trader; the cheapest costs “just” £315,000 ($399,000).

These value declines could bode ill for the company’s strategy of charging more for vehicles and its plan to launch a fully electric model late next year priced at stratospheric levels. Ferrari declined to comment, referring me to management remarks earlier this year that residual values remain pretty good while “normalizing” from elevated pandemic levels and showing different regional dynamics.

Since going public in 2015, the Italian company has expanded both the volume and variety of cars it sells, while preserving exclusivity by raising prices, restricting who can order vehicles and resulting in long waiting lists. Around three-quarters of its cars are purchased by existing clients, while almost half the company’s vehicle sales are hybrids.

Away from the Formula One race track, Ferrari has rarely put a foot wrong: Profit margins have increased, helping it obtain a stock market valuation similar to luxury fashion house Hermes International SCA.

Ferrari’s first series production plug-in hybrid was unveiled in 2019 boasting almost 1,000 horsepower, 0-62 mph in just 2.5 seconds, four-wheel drive and about 15.5 miles of electric only range. Prices for the SF90 Stradale coupe started at an eyewatering £376,000 in the UK and £418,000 for the convertible Spider version; once personalized to their owner’s satisfaction, I estimate most will have splashed out at least £450,000-£500,000.

Initially, resale values soared due to a lack of new vehicle availability during Covid. But having fetched as much a 33% premium to the sticker price in 2022, used SF90s have recently sold at a 20% discount at US auction, according to classic car insurer Hagerty Inc. whose pricing data includes the value of customized options but reflects only a small number of sales.

“Buyers will be disappointed if they were expecting similar appreciation to the SF90's high-performance hybrid predecessor, the limited production LaFerrari,” John Wiley, director of valuation analytics at Hagerty told me, adding the latter increased 135% in the first three years.

Judging by vehicles offered for on Auto Trader, value declines are even worse in the UK; a person with knowledge of these figures said the average SF90 depreciation of vehicles marketed by Ferrari authorized dealers is 24%.

Independent British dealers told me it’s fantastic to drive but highlighted several potential limitations: the plug-in hybrid v8 turbo might not appeal to purists wanting a v12 combustion engine and some early reviews weren’t great. Ferrari’s range now includes another hybrid, the 296 GTB, which offers impressive technology for a lower price (and used values for those have dropped too). Moreover, high levels of customization — a trend Ferrari has encouraged to boost revenues — can also impact resale values if the owner opts for an unusual feature or color. It’s likely that Brexit and higher interest rates are also weighing on the UK second-hand market.

Ferrari hasn’t disclosed SF90 Stradale sales volumes, but these weren’t capped, unlike for special edition models. Dealer inventories appear elevated: I found around 150 used SF90s for sale in the US, a similar number in Germany and more than 50 in the UK (including Spiders).

“Many of the production models have lost value but the SF90 has been particularly painful – they were simply priced too high to begin with,” says Tom Jaconelli, director at Romans International which is marketing one of these vehicles at around 30% below the new price. “I think they are good value now as used cars, but if you bought a new one a few years ago you will have lost a fortune.”

There’s another factor that’s worth keeping an eye on: Last year Ferrari launched the limited edition SF90 XX with a fixed rear wing, even more horsepower and priced in excess of £670,000: to have a chance of buying one, customers had to already own a regular SF90, dealers say.

Once they’ve received their XX model, some buyers may be tempted to sell the less expensive model though doing so is risky: Ferrari reportedly frowns on clients flipping cars, which might harm their chances of purchasing special edition models in future.

In fairness, 20%-30% depreciation certainly isn’t disastrous— the average vehicle typically loses around 60% of its value after three years on the road. (Ferrari told investors last month that “one country has been suffering a little bit for one specific model” but didn’t identify either.) But the SF90 does underscore the challenge Ferrari might have maintaining resale values for its upcoming EV as luxury rivals Porsche AG and Mercedes-Benz Group AG have discovered with their own expensive electrified models, the Taycan and EQS.

Ferrari appears to be trying to get ahead of this potential problem by offering customers an extended warranty for its next generation electric and hybrid supercars in return for an annual fee of around €7,000 ($7,500), Bloomberg News reported last week. This could help alleviate any customer concerns about battery longevity and high replacement costs.

If residual value pain spreads to more models and markets, it won’t just be owners who suffer; the supercar maker’s lofty stock-market valuation could be vulnerable too.