Ferrari’s stock fell after it unveiled its first ever EV. What’s going on? – Nationally
Ferrari’s stock fell nearly eight percent on Tuesday morning, one day after it unveiled its first all-electric passenger car, called the Luce — which starts at US$640,000, or about $884,000 in Canadian dollars.
The Italian automaker has long been known for its high-performance cars and racing history, but it has almost always been gas-only.
So what’s going on?
This also comes as recent data shows demand for electric and hybrid-electric vehicles is increasing following the renewal of consumer subsidies in Canada and rising gas prices amid the Iran war.
Ferrari executives and company leaders have long dismissed the idea of an electric Ferrari in the future, but that appears to be changing.
“I think people are a little nervous about Ferrari trying to go electric [car] a company where their sweet spot is truly extreme [gas] firepower and extreme performance – that’s what he’s known for,” said retail analyst Bruce Winder.
“It’s just a bit of a send-off for investors.”
Winder adds that a similar situation occurred a few years ago when Harley-Davidson introduced an electric motorcycle, which led to some backlash from those who felt that the product was not like anything other than gas-powered models.
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This eventually led to Harley-Davidson rebranding its electric offerings as Live Wire.
In Ferrari’s latest earnings report from this month, CEO Benedetto Vigna suggested that Luce represents the brand’s evolution from mainstream thinking.
“The Ferrari Luce combines incredible technology with the passion of many people,” he said. “It’s a testament to how culture and innovation can come together to create something unique.”
But not everyone agrees.
“Ferrari” was also trending on social media on Tuesday, with many users expressing negative reactions. Given the falling stock price, Winder says Ferrari may be looking to tap into changing consumer demands, which can be a challenge for brands like Ferrari that have been somewhat resistant to change.
“If a brand doesn’t innovate and target new growth segments of the market for emerging customers, they risk losing those customers as they move up and down the lifecycle,” he said.
“But if they innovate too quickly or confuse, the design is not right, or they become too rigid, where they add too much difference, they may risk alienating not just the new consumer.
“Because no one wants to buy a car that people disagree with online.”
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