⚠ Residuals Are Set by a Market Ferrari Does Not ControlModerate threat

Ferrari (RACE) — threat to the moat

The two things currently lifting revenue per car are the two things quietly pressing residual values down.

1. ReportedA used Ferrari holding its value is what makes the new one affordable in total-cost terms, and Ferrari names it: residual resilience "promotes repeat purchases." But residual values are set by auction results, collector appetite and the general price of scarce assets — none of which Ferrari sets, and all of which move with wealth, rates and taste.
   Ferrari N.V., Form 20-F FY2025 — Item 3.D, Risk Factors. The filing states that its focus on maintaining exclusivity limits its potential sales growth and profits. It warns that increasing production relative to the number of collectors may adversely affect the value of its cars as collectible items and their value in the secondary market, and that the resilience of the value of its cars after a period of ownership promotes repeat purchases. On personalisation, it warns that a higher level of personalization content may also adversely affect residual value, because personalized content generally depreciates substantially with change of ownership. On electrification, it states that electric technology is a core component of its strategy and that if the introduction of such technology proves too costly or is unsuccessful in the market its results of operations could be materially adversely affected, and that other manufacturers of luxury sports cars may be more successful at implementing it; it also warns that the shift to hybrid and electric models may adversely affect residual values if secondary sales occur at wider discounts than for combustion cars. Additional risk factors address dependence on a single production site in Maranello, the performance of independent dealers, and the risk that the interests of its largest shareholders may differ from those of other shareholders. Among the named risks and uncertainties are the success of its racing activities, and the sponsorship and commercial revenues and expenses of its racing activities as well as the popularity of motor sports more broadly. The filing states that revenues from sponsorship, commercial and brand activities are influenced by the strength and appeal of the brand, the historical success and current performance of its racing teams through Scuderia Ferrari in the FIA Formula 1 World Championship and the Ferrari Endurance Team in the World Endurance Championship, and the overall popularity of Formula 1 and other racing competitions. — FY2025 · publ. 2026-02 · source ↗
2. ReportedProduction growth relative to the collector base can hurt collectible value. And heavily personalised cars depreciate more, because "personalized content generally depreciates substantially with change of ownership" and the next owner did not choose the specification.
   Ferrari N.V., Form 20-F FY2025 — Item 3.D, Risk Factors. The filing states that its focus on maintaining exclusivity limits its potential sales growth and profits. It warns that increasing production relative to the number of collectors may adversely affect the value of its cars as collectible items and their value in the secondary market, and that the resilience of the value of its cars after a period of ownership promotes repeat purchases. On personalisation, it warns that a higher level of personalization content may also adversely affect residual value, because personalized content generally depreciates substantially with change of ownership. On electrification, it states that electric technology is a core component of its strategy and that if the introduction of such technology proves too costly or is unsuccessful in the market its results of operations could be materially adversely affected, and that other manufacturers of luxury sports cars may be more successful at implementing it; it also warns that the shift to hybrid and electric models may adversely affect residual values if secondary sales occur at wider discounts than for combustion cars. Additional risk factors address dependence on a single production site in Maranello, the performance of independent dealers, and the risk that the interests of its largest shareholders may differ from those of other shareholders. Among the named risks and uncertainties are the success of its racing activities, and the sponsorship and commercial revenues and expenses of its racing activities as well as the popularity of motor sports more broadly. The filing states that revenues from sponsorship, commercial and brand activities are influenced by the strength and appeal of the brand, the historical success and current performance of its racing teams through Scuderia Ferrari in the FIA Formula 1 World Championship and the Ferrari Endurance Team in the World Endurance Championship, and the overall popularity of Formula 1 and other racing competitions. — FY2025 · publ. 2026-02 · source ↗
3. ReportedAnd heavily personalised cars depreciate more, because "personalized content generally depreciates substantially with change of ownership" and the next owner did not choose the specification. That is an uncomfortable admission given that personalisation is currently Ferrari's main growth lever — the two things pulling revenue up are pulling residuals down.
   Ferrari N.V., Form 20-F FY2025 — Item 3.D, Risk Factors. The filing states that its focus on maintaining exclusivity limits its potential sales growth and profits. It warns that increasing production relative to the number of collectors may adversely affect the value of its cars as collectible items and their value in the secondary market, and that the resilience of the value of its cars after a period of ownership promotes repeat purchases. On personalisation, it warns that a higher level of personalization content may also adversely affect residual value, because personalized content generally depreciates substantially with change of ownership. On electrification, it states that electric technology is a core component of its strategy and that if the introduction of such technology proves too costly or is unsuccessful in the market its results of operations could be materially adversely affected, and that other manufacturers of luxury sports cars may be more successful at implementing it; it also warns that the shift to hybrid and electric models may adversely affect residual values if secondary sales occur at wider discounts than for combustion cars. Additional risk factors address dependence on a single production site in Maranello, the performance of independent dealers, and the risk that the interests of its largest shareholders may differ from those of other shareholders. Among the named risks and uncertainties are the success of its racing activities, and the sponsorship and commercial revenues and expenses of its racing activities as well as the popularity of motor sports more broadly. The filing states that revenues from sponsorship, commercial and brand activities are influenced by the strength and appeal of the brand, the historical success and current performance of its racing teams through Scuderia Ferrari in the FIA Formula 1 World Championship and the Ferrari Endurance Team in the World Endurance Championship, and the overall popularity of Formula 1 and other racing competitions. — FY2025 · publ. 2026-02 · source ↗

• Ferrari N.V. Form 20-F, FY2025 (SEC EDGAR)