Ferrari’s stock fell nearly eight per cent Tuesday morning, in the future after unveiling its first fully electric passenger vehicle, called the Luce — which starts at US$640,000, or roughly $884,000 in Canadian dollars.
The Italian automaker has long been known for its high-performance vehicles and racing history, but they’ve almost at all times been exclusively gas-powered.
So what’s happening?
This also comes as recent data shows demand for electric and hybrid-electric vehicles is surging following the renewal of consumer incentives in Canada and with gas prices skyrocketing amid the war in Iran.
Previous Ferrari executives and company leaders had long dismissed the thought of an electrical Ferrari in the long run, but that appears to be changing.
“I believe persons are somewhat nervous about Ferrari attempting to kind of turn into an electrical [car] company when really their sweet spot is extreme [gas] combustion and extreme performance — that’s what they’re known for,” retail analyst Bruce Winder says.
“It just sends somewhat little bit of jitters through some investors.”
Winder adds that an identical situation happened several years ago when Harley-Davidson launched an electrical motorcycle, which led to some backlash from those that felt the brand wasn’t synonymous with anything but gas-powered models.
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This eventually led Harley-Davidson to rebrand its electric offerings as Live Wire.
In Ferrari’s most up-to-date earnings report from this month, CEO Benedetto Vigna suggested the Luce represented the brand’s evolution from traditional concepts.
“The Ferrari Luce brings together a lot extraordinary technologies and the eagerness of so many individuals,” he said. “It’s the evidence of how tradition and innovation can come together to create something unique.”
But not everyone agrees.
“Ferrari” was also trending on social media Tuesday, with many users voicing negative reactions. In the case of the falling stock price, Winder says Ferrari could also be seeking to appeal to changing consumer demands, which could be a challenge for brands like Ferrari which were somewhat immune to change.
“If a brand doesn’t innovate and goal recent growing segments of the marketplace for emerging customers, they risk losing out on those customers as they develop and move further down the life cycle,” he says.
“But in the event that they innovate too quickly or they get it unsuitable, the design’s unsuitable, or they’re too radical, where they’re adding too many differences, then they may risk alienating not only the brand new consumer.
“Because nobody desires to buy a automobile that folks are dissing online.”
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