What's going on?

Ferrari announced on Thursday that it�s investing billions into developing a slate of EVs.

What does this mean?

Ferrari has been working tirelessly for years to engineer its gas-fueled supercars into the perfect combination of deft handling and raw power. But EVs have been a distraction lately, sauntering into the garage and elbowing the jukebox like they�re the Fonz or something. That�s since forced the company to release a few hybrid models, which now make up 20% of its sales.

But even Ferrari has had to admit that it needs to move faster. So it�s now hoping to launch its first fully electric car in 2025, as well as make 40% of all sales fully electric within the following five years. And it�s just laid out a plan to do just that: the company is turning its flagship Italian factory into a hub for battery-powered cars, as part of a $4.6 billion investment that aims to make 60% of its models electric or hybrid by 2026.

Why should I care?

For markets: Ferrari lays it on thick.
Ferrari�s shares have underperformed most of its EV-ready rivals lately, so Thursday�s announcement will have come as a relief to investors. And that�s before the company got to the non-EV-based good news: Ferrari said it was expecting its profit to climb by as much as 80% this year compared to last, it promised to boost shareholder dividends, and it said that it intends to buy back over $2 billion worth of its own shares by 2026.

Zooming out: Your Fiat will have to wait.
Thing is, Ferrari is actually better-placed than most to thrive in this environment. Its customers, after all, aren�t the sorts of people wringing their hands over inflation, given that they�re, well� rich. But most of us aren�t, which might be why data out on Thursday showed that European car sales fell 13% in May from the same time in 2021 � the 11th drop in a row.