As the June 5 deadline for a major EU probe into Chinese EVs draws closer and the Biden administration seeks to impose a 100% tariff, the CEO of legendary Italian supercar brand Ferrari (RACE) says that the challenge imposed by Chinese EVs should be an opportunity for Europe’s finest to be better.
Benedetto Vigna, chief executive officer of Ferrari, during a Bloomberg Television interview in London on May 23, 2024.
In an interview with Bloomberg TV, Prancing Horse leader Benedetto Vigna said that the presence of Chinese vehicles on European shores should motivate the continent’s automakers to do much better in the face of stiff competition.
“Maybe, yes, people are defining [Chinese EV competition] as a war, for me, it is a nice competition,” Vigna told Bloomberg TV. “For me, this is a call to action for Europe. This is a call to action to become more […] pushy, less complacent.”
The Ferrari SF-24 of Charles Leclerc of Monaco in the garage during previews ahead of the F1 Grand Prix of Monaco at Circuit de Monaco on May 23, 2024 in Monte-Carlo, Monaco.
Vince Mignott/MB Media/Getty Images
The CEO of the legendary performance car brand compared the impending competition to another kind of competition that Ferrari is well-versed in – Formula 1.
While Scuderia Ferrari drivers Charles Leclerc and Carlos Sainz prepare to compete in the upcoming Monaco Grand Prix, Vigna gave a clever racing-themed analogy as to why Europe’s automakers should compete with its Chinese counterparts head-on, instead of relying on government regulation as a safe haven.
“In my life, I was told if someone is faster than you, better that you are faster than them,” Vigna said about competition from Chinese automakers. “This is what we are doing in Formula 1. In racing, that’s what you have to do; if someone is faster, be faster than them, don’t try to stop them.”
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Vigna’s comments come as Beijing prepares itself to unleash retaliatory tariffs of 25% on imported vehicles with “large engines” exceeding 2.5 liters in response to President Biden’s tax hike. Such a move would not only affect sales of GM’s profitable V8-powered pickups, and Chevrolet Tahoe and Suburban SUVs, but also Ferrari’s supercars.
Currently, Ferrari’s smallest engine is a twin-turbo 3.0-liter V6, which is offered exclusively in the 296 GTB and GTS plug-in hybrids. Even though vehicles like it will be subject to such tariffs, Vigna is unfazed, as existing tariffs make the Chinese market account for less than 10% of Ferrari’s sales.
“The market in China is still not mature,” Vigna said. “China is not for Ferrari what it is for other luxury brands.”
Stellantis CEO Carlos Tavares speaks to journalists during a joint media event by Stellantis and Leapmotor in Hangzhou, in eastern China’s Zhejiang province on May 14, 2024.
Vigna is not alone in talking critically about impending EU tariffs on Chinese imported EVs. In a recent interview with Reuters, Stellantis (STLA) CEO Carlos Tavares warned that such tariffs are “a major trap for the countries that go on that path,” noting that it would impede on automaker’s abilities to meet the price challenge faced by its new competition.
“When you fight against the competition to absorb 30% of cost competitiveness edge in favour of the Chinese, there are social consequences. But the governments, the governments of Europe, they don’t want to face that reality right now,” Tavares said.
He also warned that such tariffs will only fuel inflation in the territories where they are imposed, as automakers will have to make up for costs accumulated in a “Darwinian Chinese-led price war” that will end up trickling down to suppliers, OEMs and eventually, the consumer.
“We are not talking about a Darwinian period, we are in it,” Tavares said. “This is not going to be easy for the dealers. It’s not going to be easy for the suppliers. It’s not going to be easy for the OEMs. As we know in Europe, everybody is talking about change as long as change is for somebody else.”
At market close, Stellantis N.V., trading under STLA on the New York Stock Exchange, closed at $21.92, down 0.81% for today.
At market close, Ferrari N.V., trading under RACE on the New York Stock Exchange, closed at $413.53, down 0.37% for today.
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