Well, we couldn't help but start here. We are in Maranello inside a Ferrari factory. You can see it moving behind me. A symbol of innovation, technological avant-garde, excellence, performance, racing, speed, craftsmanship, Made in Italy, and that unique creative design. We inaugurate Morning Finance Leaders with an interview with CEO Benedetto Vigna, and we will take you behind the scenes of the company, inside the factories, to tell you about today's protagonists, the leaders and visionaries. Follow us.
Morning Finance Leaders, welcome, and welcome Benedetto Vigna. Thank you, thank you for inviting us to this wonderful building. And yes, it's beautiful. And it's two years old, and we built it in six months. And ahead of schedule compared to some targets set at the Capital Markets Day, we want to take you inside this building, which is one of the most innovative and energy-efficient in Europe, and it tells the story of Ferrari's strategy, which is flexibility in electrification.
Exactly. The 'E' in the E-Building also stands for efficiency, technological evolution, and energy, because we believe it's important to offer our customers cars with any type of propulsion. In '47, our founder started building internal combustion engines. In '13, on the road, we started offering hybrid cars, and in '26, we will start offering electric cars, because the choice belongs to the customer and because technological transitions are never digital, meaning they don't happen suddenly. It's a transition phase that lasts a long time. I've seen it several times in my life. And if we want, one of the best decisions we made was communicating it to the markets in '22. Technological neutrality is fundamental.
And indeed, behind us we have hybrid engines, internal combustion engines, and the Ferrari electric motor will arrive. Before we get there, I want to take a step back because I remember at the Capital Markets Day you said, 'The electric will be a new breed, a completely innovative experience, and therefore a new market for Ferrari.' And you know what it means to create a new market because when you were at ST, you are a subnuclear physicist, you created the three-axis accelerometer which then became the heart of the Nintendo Wii, the iPhone, and so many technologies.
Yes. Well, 20 years ago, no, 25 years ago. 25 years ago, I remember because we were trying to offer more or less standard solutions to the automotive world and we weren't breaking through. At that point, we decided with the team to follow a new strategy, what was later classified as Blue Ocean Strategy, right? Meaning creating a new market where you set the value of what you sell. So we started making components, accelerometers that measured movements in space of what people did, and we started finding applications in mobile phones, but first of all in games. And I remember that the player who listened to us the most, who gave us trust, was Nintendo. And I remember it was March 4, 2005, in Kyoto, we were in a meeting, and after a while, the CEO Satoru Iwata came in and I remember he immediately said, 'I understand the technology, the price is very challenging, the price must be this, if you agree, let's go ahead.' And we did. So that's when the creation of a new market began, which didn't exist before, because before that, mobile phones didn't have sensors. Today we take for granted that there are a whole series of sensors, right? Accelerometers, gyroscopes, pressure, magnetic, micro, there's everything. Well, they didn't exist, so yes, you have to believe, you have to dare, and then you have to be persistent.
I was about to ask you, I was about to ask you how you got there, how important the open innovation approach is with your team, and if there's any last-minute anecdote you can tell us about how you arrived to present the product.
Well, there are two important things, in my opinion. Reaching the goal is important, but what you become by reaching the goal is even more important. And really, people tell you this, you don't understand it until you live it. And every time it's like that. And there are many anecdotes. I remember in 2009, this is the one I like the most, it was October, I remember, we were in Cupertino proposing a gyroscope to Apple, and I said the gyroscope would be available for December 2010. Steve Jobs arrived with some VPs in the meeting and they told me we had become a bit slow, that we needed to be faster, and so he asked for 20,000 pieces for January. I was in the US, I called the head of R&D who now also works here with me at Ferrari and said we need to accelerate, we need to deliver the pieces in January, letting them believe it was January 2011. And he said to me, 'Yes, but it's practically December.' I said, 'No, no, January, in two months.' And so it happened. We did it, we did a collaborative job, we moved people, we gave the right priorities, and a new market began with the gyroscope in mobile phones. Listen, you really need the team to work in unison, you need to dare because I remember at that time there was a person who believed that since no one else had managed to make a three-axis gyroscope, he said, 'Well, the others didn't make it, we can't do it.' And I remember talking to him and saying, 'Listen, share your doubts with me, I'm your boss, but don't share them with the people who have to make the product, because otherwise there are reasons.' These are some important anecdotes I always keep in mind, but it takes the team, it takes a lot of work, a lot of competence, but it also takes a bit of luck, finding clients who give you trust. And here, when you propose new technologies, new products, as they say, first you sell yourself, then you sell the product. It's important to be able to explain simply what the product does, putting yourself in the customer's shoes.
You reminded me when you said it's important to motivate, an aspect you insist on a lot is filing patents because it gives you an idea of the trajectory beyond. And here I come to Ferrari Luce. Why this name and what does it represent for Ferrari?
Well, Ferrari Luce because our Ferrari will also be electric, right? Everyone expected it, and at first they thought we would call this car electric, but calling an electric car with so much innovation would have been reductive. Then 'Luce' (Light) also has a symbolic meaning, right? It illuminates the path ahead. Light is also a way of saying it's something closely linked to the electromagnetic world. If you look at Maxwell's equations, since I studied them a few years ago, as a subnuclear physicist, which we don't know, those equations always have the constant C, which is the speed of light. No, really, 'Luce' because it's rich in innovations, because it wants to be a way of communicating that this is the first and it illuminates the path ahead for us in terms of innovation in this sector. I think it's a beautiful name, as I've seen many customers appreciate it, I've seen many positive reviews, and we expect this to be a bit of the light of what's ahead of us, also because it comes at the end of a result. Electrification started, as always happens at Ferrari with this cross-contamination, from Formula 1 in 2009. And we await the World Premiere in May. May 25th.
But can we say it's the first true, full Ferrari branded Benedetto Vigna?
I think it's branded Team Ferrari like all the others. Honestly, I contributed like many others in the team. I will never forget when I came here on September 1st, '21, and I went around the various laboratories and found so many skills that didn't seem to exist outside, but they did, and there are many. And it's thanks to those skills, thanks to the passion, that in my opinion we have made a unique product. Then it will be the customers to comment, to judge, but it's truly a unique product. And we chose to do this launch in several steps because there are so many innovations that it's good to explain them. So step one, the technological heart, step two, the interiors, and the last step will be everything together. And we chose May 25th for two reasons. The first is that it was May 25, '47, when Franco Cortese drove the first Ferrari car, the 125S, and managed to win on the Rome circuit. And there's a beautiful phrase he said, 'This 12-cylinder engine, the RPMs rise so much faster than the four and six-cylinder ones. It really seems like an electric engine.' This is Franco Cortese in '47. And then there's another fact, with that same car on May 11th on the Piacenza circuit, he was about to win, but then there was a failure. And the founder of Ferrari, Enzo, said it was a very useful error because thanks to that error, thanks to that failure, they were able to improve the product and thus win on May 25, '47. So a whole series of meanings, because history is important.
Listen, but in a certain sense Ferrari Luce is already unique, because there's a commission, it speaks two languages, that of Silicon Valley, of Johnny Ive, of technological avant-garde, of innovation which is part of your DNA, and then there's the craftsmanship of Made in Italy in everything that is the interior, which speaks of analog instead of digital, and that is truly, I think of the steering wheel, I think of other characteristics of the interior.
Well, we say two important things. The first is that today, dealing with so many digital tools, we think and delude ourselves that our brain's information processing capacity has increased, but in reality, it hasn't increased much compared to our predecessors from thousands of years ago. It's a pure illusion. This is to say that when you get into a car, which is rich in digital, in screens, we don't feel entirely comfortable, because one thing is getting into a self-driving car where you do nothing but watch a movie. And another thing is getting into a car where you have to interface with a world that speaks a different language from ours. And this is where what we call the importance of the digital comes in, meaning the physical plus the digital. That's why the displays are simple, they have this three-dimensional effect, there are levers. Then there's the other aspect, which is open innovation. We believe it's fundamental, increasingly important to be able to work and observe reality from different points of view. And this is where the collaboration with Johnny Ive comes in, who worked together with our team here, with Flavio, to create something unique. Open innovation means it's an act of humility. I know something, others know something else, we put them together and something unique comes out. This, in my opinion, is the important thing.
Is there a particular detail that you like the most inside Ferrari Luce?
Yes. Yes, or on which you insisted. Yes, I really like the paddle shift, the gear shift on the steering wheel. Today, our Luce wants to be a demonstration that electric cars are not necessarily heavy, they are not cold because when you get in you don't understand what to do. They are not without gears. Ours has gears. And then they are not without sound, even Luce has a sound, Luce has gears, Luce is light, Luce is not difficult to use. So, if you want, among all the details, perforated OLED screens, three-dimensional effects, anodized aluminum, the thing I like the most is the paddles on the steering wheel because they convey a clear message: technology at the service of man, technology at the service of the emotions of the driver. And that's why I like them, because in my opinion the best way to innovate is not to start from technology, but to start from the person who uses the technology. And if I drive it, and I drove it with many other colleagues a week ago in Sweden, we even saw the Northern Lights. And there, you realize that when you drive, you need to change gears. That's the detail I like the most.
Who is calling you with interest for this electric and how much is the interest? Obviously, orders are not yet open, I imagine.
Well, this morning a historic client of ours, who has beautiful cars from the 50s and 60s, wrote to me, 'You convinced me? I would like to come and see because it is unique.' So we have two types. We have clients who show more and more interest in Luce because they have understood that Luce is not just electric, it's also electric. And then we have new clients who are approaching our brand precisely because of this sustainability dimension.
But how much AI is in Luce? In the meantime, we see a chassis passing behind here. I don't know if the camera probably caught the beautiful 849 Testarossa, it's the chassis of an 849 Testarossa, because here we are on the first floor. And by the way, about this, when you say 'man is at the center,' we see behind here there is cutting-edge automation, but obviously craftsmanship.
Yes, yes. No, man is, as in Luce, right? Technology and man, technology at the service of man. Here we have all these stations that allow our colleagues here in the factory to work better, in a more ergonomic way, and to create unique pieces. So, often with digital, whatever it may be, you lose a bit of contact with the slow, emotional dimension of man. And this is what we want to keep alive with our cars. It's fundamental. And we have used AI, yes, to optimize some electromagnetic field flows of the engine, but regarding the human-car interface, we don't want any AI mediation. We want man, with our speed or perhaps with our slowness, to be able to enjoy and interface with chips, displays, and other things.
But speaking of this, a man who knows technology well like you, and in light of what you just told me, I ask you, when you see the speed with which this AI is moving, every week we have new plugins, new large language models, new papers warning about safety. What do you think?
Well, I think three things. The first is that there will be many companies that are currently booming that will disappear. We saw it in 2001 with the dot-coms, we saw it in the past with companies that made PCs. It's always like that, right? The number of innovations is a bit like a bunch of grapes. If you keep it in mind, it starts wide and then narrows. So at the beginning there are many, many startups, but in the end, few remain. It's always like that. I remember the 90s, the companies I visited for mass storage devices, memories, there were many, today there are three. So there's always a concentration. This also applies to other sectors. That's one. Second thing, it's not yet clear what the effective use cases are for us. There are many, it's normal, right? Some will break through. I remember when I used to propose MEMS technologies, I had a whole list of possible applications, but if you look back 20-25 years, only 4-5 survived, meaning the yield is always... Then there's the third thing, in my opinion, that we need to keep in mind, which is that an excessive presence of AI requires too much energy. Too much energy. I don't think the world can afford to put so much energy into algorithms. So this gentleman here consumes very well. This consumes 20 watts. 20 watts. If I see you, I recognize you much more easily than a computer which has to spend much more energy. So, in my opinion, one, too many companies, many companies will die, there will be a concentration. Two, what the use cases are, we'll see, we'll see together, but they certainly won't be all the ones being proposed now. Three, as it is, I don't think there's enough energy to power all this, and also some projects, let's say, a bit... of going into space. Maybe we need to... I think there's a lot to learn from how our brain works. If I talk about artificial intelligence, but I also see there are several articles that talk about an artificial intelligence that uses mechanisms of recognition more similar to how our head works and not matrix multiplications, which consume so much energy.
Listen, coming back from space to Earth, obviously we are in a very complex moment, beyond what is happening in the Middle East, it was already so before, because tariffs on one hand, the unpredictability of policies, China's restrictions, also what happens with memory chips which are almost impossible to find because they all go into... How do you build an electric car in a scenario like this?
Well, look, I think the beauty of life is that there are some things you can control and some things you can't control. Well, we can control what happens here in our factory, we must be aware of what happens outside and manage the situation. Then, inside here, we must do our best to create unique products, products that continue to make our customers fall in love. Luce is something we want and hope and believe will make customers fall in love. It doesn't want to be a car we impose on customers. If customers like Luce, they buy Luce. If they like the internal combustion, they buy the internal combustion. So let's say the moment is not simple. I always tell myself that in the race of history, Ferrari has gone through many phases, right? Even in '47, when the first internal combustion Ferrari was born, the 12 cylinders weren't the first, there were already other 12 cylinders, the roads weren't paved. Today we have a lot of noise. I think the solution for us, as for any other company, is to focus on what is under our control, do it to the best of our ability, give it our all, use our talents to the best, and above all, listen to customers, anticipating them too, because you can't just do what customers ask, because if you do what the customer asks, you're late, because someone else has already proposed it. And then there's the other aspect of working with others. We are working with others. We believe that collaboration with other partners is fundamental to continue to create something unique.
