Ferrari is preparing to debut its first fully electric supercar in October—an aggressive move aimed at reversing its sales slump in China. The new model, tentatively known as the Elettrica EV, is expected to benefit from a significantly reduced tax burden, giving the Italian marque a fresh competitive edge in the world’s largest auto market.
Lower Taxes Give Ferrari’s EV a Strategic Advantage
Unlike Ferrari’s traditional 12-cylinder combustion-engine models—heavily taxed in China with combined duties nearing 118%—the electric Elettrica will face a more manageable compound tax rate of roughly 30% of its retail price. This includes exemptions on the high consumption tax that applies to fuel-powered imports, offering a critical cost-saving advantage for Chinese buyers.
“One of the cars we’re launching this year will fit better for the Greater China region,” said Ferrari CEO Benedetto Vigna during a recent earnings call. Although he didn’t confirm the model name, the implication is clear: the Elettrica could play a pivotal role in Ferrari’s regional revival strategy.
Ferrari’s China Sales Hit Four-Year Low
Ferrari’s shipments to Greater China fell 25% in Q1 2025, marking the lowest volume in nearly four years. The slowdown reflects broader headwinds in the region’s luxury car segment, which contracted by roughly 20% in 2024 according to Thinkercar, a Shanghai-based consultancy. Economic uncertainty and weakened consumer sentiment have dampened high-end vehicle sales, even as domestic EV makers like BYD push into premium territory.
Despite the downturn, Ferrari’s exposure to the Chinese market remains relatively modest—capped at around 10% of global deliveries. But that limit may be reevaluated as the company pivots to electrification, Vigna suggested earlier this year.
China’s EV-Friendly Policies Offer Ferrari a Timely Opening
China has long penalized gas-guzzling imports. Any foreign vehicle with an engine larger than four liters is subject to a 15% import tariff, a 40% consumption tax, and a minimum 13% VAT. By contrast, EVs are exempt from the consumption tax, a major selling point in the luxury bracket.
This regulatory landscape gives the Elettrica a clear pricing advantage over Ferrari’s traditional models—possibly making it the most accessible Ferrari ever for Chinese consumers. With other global automakers already capitalizing on China’s EV incentives, Ferrari’s long-awaited electric entry is timely.
Looking Ahead: Ferrari’s EV Strategy and Market Response
Though Ferrari’s largest market remains the United States—where tariffs under former President Trump are prompting price hikes—the brand’s long-term strategy clearly includes expanding its EV footprint. China’s mix of luxury demand, tightening emissions policies, and tax-friendly treatment of electric vehicles makes it a natural next focus.
While many details about the Elettrica are still under wraps, it’s expected to combine Ferrari’s signature performance DNA with modern battery-powered technology. Whether it can win over affluent Chinese consumers and fend off increasingly polished domestic EV competition remains to be seen—but the company is banking on a jolt of electricity to power its next chapter in Asia.
