FERRARI ENTERS A MULTI-YEAR AGREEMENT WITH ANDRETTI FORMULA RACING  

Rhea-AI Summary

Ferrari (NYSE/EXM: RACE) has announced a multi-year agreement with Andretti Formula Racing, set to begin in 2026. Under this agreement, Ferrari will supply power units and gearboxes to the Andretti racing team, which is led by TWG Global and General Motors. The agreement is contingent upon Andretti Formula Racing receiving official confirmation and approval from the FIA for their entry into the 2026 FIA Formula One Championship.

Positive

• Strategic expansion into power unit supply business for F1
• New revenue stream through multi-year supply agreement
• Partnership with established automotive player General Motors

Negative

• Agreement contingent on Andretti's F1 entry approval
• Potential resource allocation requirements for additional team support

Insights

Motorsport Industry Analyst

The Ferrari-Andretti power unit agreement marks a significant strategic move in Formula 1's competitive landscape. This partnership aligns with Ferrari's core business model of leveraging its racing technology and brand prestige. The 2026 timing is particularly strategic as it coincides with F1's new power unit regulations, potentially offering Ferrari additional development insights and data from an extra team running their powertrains.

While the financial terms aren't disclosed, power unit supply agreements typically generate $15-20 million annually per customer team. Beyond direct revenue, this collaboration with Andretti and General Motors could strengthen Ferrari's position in the important U.S. market, where F1's popularity is surging. The deal's execution remains contingent on Andretti securing FIA approval, adding a layer of uncertainty to the potential benefits.

Financial Analyst

This agreement represents a calculated expansion of Ferrari's F1 power unit customer base, potentially adding a new revenue stream starting 2026. The timing aligns with Ferrari's broader strategy to diversify income sources while maintaining its premium positioning in motorsport. The partnership with Andretti, backed by American automotive giant General Motors, could enhance Ferrari's market presence in North America, where the company saw 17% of its shipments in recent quarters.

The deal's structure as a multi-year agreement provides predictable revenue visibility, though the actual financial impact will likely be modest relative to Ferrari's overall revenue base of over 5 billion euros. Investors should note that the agreement's materialization depends on Andretti's F1 entry approval, which remains uncertain despite strong backing.

Maranello (Italy), December 10, 2024 – Ferrari N.V. (NYSE/EXM: RACE) (“Ferrari” or the “Company”) today announces a multi-year agreement starting from 2026 with Andretti Formula Racing LLC, regarding the supply of power unit and gearbox to the racing team led by TWG Global and General Motors, subject to Andretti Formula Racing LLC receiving written confirmation from the FIA – F1 that its entry to the 2026 FIA Formula One Championship has been accepted and approved.

Attachment

• Press Release_10.12_ENG

FAQ

When will Ferrari (RACE) begin supplying power units to Andretti Formula Racing?

Ferrari will begin supplying power units and gearboxes to Andretti Formula Racing in 2026, subject to FIA approval of Andretti's F1 entry.

What is included in Ferrari's (RACE) agreement with Andretti Formula Racing?

The agreement includes the supply of power units and gearboxes from Ferrari to Andretti Formula Racing.

What condition must be met for Ferrari's (RACE) agreement with Andretti to take effect?

The agreement requires Andretti Formula Racing to receive written confirmation and approval from the FIA for their entry into the 2026 FIA Formula One Championship.

Who are the key partners involved in the Ferrari (RACE) and Andretti Formula Racing agreement?

The key partners are Ferrari, Andretti Formula Racing (led by TWG Global), and General Motors.