ICE cars will become luxury items like mechanical watches are today
Ferrari has recently unveiled its first fully electric car. It is an SUV. Public reactions have been somewhat critical on two counts: for being Ferrari’s first SUV and for being fully electric.
Ferrari may dilute its aura as a supercar manufacturer since SUVs are usually considered family cars. I see the point, but the luxury SUV is an attractive market for sports car manufacturers. Porsche, for example, has had a lot of success in this market with the Cayenne, and it does not seem to have affected the status of its more radical sports cars, like the 911. This seems like a minor issue, and a smart move on Ferrari’s part to increase the number of markets in which it operates.
The second critique is more interesting. I don’t know at this point if Ferrari plans to introduce electric motors across its whole range, or only in the SUV line. For a manufacturer like Ferrari, the electric motor may be what the quartz movement was for Swiss watchmakers. Electric motors are better than internal combustion engines (ICE) from a performance point of view, but they are a completely different and much simpler technology.
The mechanical watchmakers that thrived after the introduction of the quartz movement, were those that changed their positioning from manufacturers of precision instruments to makers of luxury objects. The emphasis shifted from accuracy to appreciating movements for the craftsmanship that goes into making them. The reason is that quartz movements are very cheap, and thus cheap watches can be more accurate than the best mechanical ones. Something similar is happening with car performance. A very affordable Tesla approaches the performance of a Ferrari.
I think Ferrari will continue producing ICE cars past the point where those engines can deliver superior performance, and will change its positioning accordingly. Raw performance will be de-emphasized in favor of craftsmanship and exclusivity to a much higher degree than it currently is.