Ferrari, the luxury automaker known for its high-performance sports cars, is building a new factory in Maranello, Italy. The plant is set to open in June 2024, and it will enable the first fully electric Ferraris to be available for purchase by the end of 2025. Ferrari’s announcement represents a significant milestone for the company as it transitions toward EVs, driven by increasing pressure from customers and investors.

The Maranello factory will have a production capacity of 15,000 electric vehicles per year. Analysts expect the first electric Ferrari to be an SUV, although the company has yet to confirm this speculation. The EV plant will also produce next-generation powertrains, including hybrid and plug-in hybrid systems, to meet the growing demand from customers.

Ferrari has traditionally been hesitant to produce electric vehicles. The company has prided itself on producing cars with loud roaring noises and high sustained top speeds. For many years, Ferrari believed that electric vehicles were incapable of replicating these benefits. As recently as 2013, former Ferrari chairman Luca di Montezemolo stated that the company would “never” manufacture EVs. However, at a meeting last year, Ferrari told investors that 40% of its vehicles will be electric by 2030. (An additional 40% will be hybrids.)

A major reason why Ferrari is moving forward with EVs is because it anticipates significant improvements in battery quality in the next few years. The company plans to invest 4.4 billion euros by 2026 to research solid state batteries. Solid state batteries have the potential to replicate the power of internal combustion engines by dramatically reducing battery size.

By pouring billions into the Maranello factory and battery research, Ferrari has conceded that automakers who reject electrification have no future.