Ferrari's most expensive models—supercars and Icona series—contribute wildly disproportionate profits to the company, with estimated 80-90% gross margins compared to ~50% average, making just 1-5% of production responsible for up to 30% of annual profits.

(02:53:15) F80 average selling price is about $4 million. They're making $799. So that is $3.2 billion of Ferraris just in that car. >> Wow. $3.2 billion of Ferraris in 799 examples. >> Yes. Now that's retail. So let's assume a 10% retail margin that goes to the dealership. So, $2.9 billion of F80 revenue to Ferrari. Let's assume those deliveries happen about over the course of 2.5 years, which means that give or

(02:53:50) take 1 and a4 billion of revenue in the first 12 months is going to Ferrari from that supercar. That's 15% of revenues for the year, just from that one car model. But that is not the whole story. Ferrari has disclosed that the Icona and the supercar models have higher margins than the rest of the line. Of course they do. >> And I've seen lots of very credible

(02:54:14) estimates. They're way higher. Like I've seen 80% I've seen 90% gross margins for the supercar. >> Wow. >> And this is intuitive. You can imagine when Ferrari throws an extra $10,000 of something nice in the supercar, they mark it up a lot more since the buyers are wildly price insensitive. So, I think that it's not crazy to assume that while that car will contribute 15% to revenues in the first 12 months, it's

(02:54:41) more like 30% of Ferrari's annual profits just from that one supercar in its first year. It could be even higher than 30%. >> Wow. Yeah. So, it's critically important to the business. >> The business is in the supercars. >> Yeah. >> I mean, this isn't quite true, but it is funny to think about this framing. The Ferraris you see driving around occasionally, those are just peanuts for