The World's Top Electric Vehicle Stock Might Be Your Last Guess
Key Points
Investors are often surprised to see Ferrari's mix of hybrids and internal combustion engine offerings.
Despite the increase in hybrid vehicle deliveries, Ferrari's margins have actually risen.
The stock often trades at a premium, but in recent months it has presented a better opportunity.
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The global automotive industry is driving toward a future of electrification -- it's just a question of the pace at which each automaker is moving. China, for example, is far ahead in electric vehicle (EV) development and infrastructure, and its new-vehicle market is roughly 50% new-energy vehicles.
Many investors think of automakers such as Tesla and BYD when considering EV stocks, but the best opportunity in EV stocks right now might be the automaker you least expect: racing juggernaut Ferrari (NYSE: RACE). Here's why.
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Wait, Ferrari is an EV stock?
Few investors think of Ferrari as an EV stock, but that's a huge mistake. In fact, perceptive investors could have noticed the change in the automaker's mix of sales over the last few years.
Image source: Ferrari.
Back in 2022, Ferrari's shipments were 78% internal combustion engine and 22% hybrids. Fast-forward to the first six months of 2025 and the breakdown for Ferrari shipments is around 55% internal combusion engine and 45% hybrid. While full-electric vehicles are still far less profitable compared to their gasoline counterparts, Ferrari's surge in hybrids hasn't slowed down its margin gains over recent years.
RACE Operating Margin (TTM) data by YCharts.
Not only is Ferrari quickly accelerating its hybrid shipments, and doing so with increasing profitability, the company is calculating when might be the right time to debut its first full-electric vehicle. The long-awaited EV from Ferrari is called the Elettrica. Whether investors like it or not, it will be pivotal in deciding Ferrari's pace diving into the future of EVs. Entering the full-EV market too quickly makes it expensive to readjust later, as automakers are finding out, while being too late could be costly by missing out on building its future cadre of enthusiasts.
"Luxury EVs are still a young and immature category," says Brian Lum, an investment manager at Baillie Gifford, according to Barron's. "It's important to build that next generation of Ferraristi, and electrification should help them to do that."
Why buy now?
Ferrari as an automaker is uniquely positioned with ferocious demand for its products, a line of previous customers waiting for the next supercar to hit the market, margins that competitors can only dream of generating, and a racing heritage that can power its brand to heights few attain. All of these positives come at a cost, and that cost is a premium price for its stock compared to mainstream autos.
RACE PE Ratio data by YCharts.
However, Ferrari has given investors a slight opportunity in recent months to take advantage of an unusually low price-to-earnings valuation for the stock, which declined following the company's guidance that left analysts wanting more, perhaps forgetting that Ferrari often lowballs its guidance to handily beat it later. For investors, Ferrari might not be the first place you look for top EV stocks -- but maybe it should be.
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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company and Ferrari. The Motley Fool has a disclosure policy.
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