() -- Shares of Ferrari NV dropped nearly 8% following negative reactions to the appearance of its first fully electric vehicle, marking a challenge for the Italian supercar company's contentious shift toward electric vehicles.
The reveal of the €550,000 ($640,000) Ferrari Luce received mostly unfavorable responses from industry experts andsocial mediainfluencers alike, who likened the four-door, five-seater's appearance to mainstream electric vehicles. For the Luce, Ferrari departed from the aesthetic linked to design director Flavio Manzoni and enlisted Jony Ive, former head of design at Apple Inc., to develop the car.
The vehicle resembles a "combination of a Honda Accord EV and a Tesla 3," wrote Pierre-Olivier Essig, head of research at AIR Capital, in a note. "We are confused by Ferrari's new approach."
The launch also occurs at a time when predicting demand for premium electric vehicles has become more challenging, with some competitors such as Lamborghini and Porsche AG delaying their electrification efforts due to insufficient consumer interest.
The stock price dropped after a presentation in Rome that signified the last phase of a three-part unveiling of the electric vehicle, which started last year with the car's fundamental technology and subsequently revealed more details.its interior.
The stock dropped by as much as 7.8% during early trading in Milan, and was 6.4% down at 1:37 p.m., marking the biggest fall since October. The company's value stands at €53 billion.
Although the car's design was disappointing to many, driving it could offer a different perspective. The Luce produces approximately 1,000 horsepower and can reach 100 kilometers per hour (62 mph) in 2.5 seconds, faster than Ferrari's V12-powered Purosangue SUV. It has a top speed exceeding 310 kph.
Ferrari hasn't approached this without careful consideration, and we are aware that significant interest has been sparked by the Luce," wrote Bernstein analysts, led by Stephen Reitman, in a report. He believes there are sufficient Ferrari owners and enthusiasts, both new and long-time, "to ensure that the Luce solidifies its place in Ferrari's lineup.
Nevertheless, the initial response contributes to errors made by Ferrari, which outlined long-term goals last year thatdisappointed investorsand sparked doubts about how it will reconcile electric technology with the combustion-engine vehicles that continue to be vital to its identity. Ferrari's 2030 strategy reduced the anticipated percentage of fully electric cars by half to 20% of its offerings, while aiming for double that amount of traditional fuel-powered models.
Test Case
Created in collaboration with Ive and Marc Newson at LoveFrom, the creative group established by the former Apple design executive responsible for the iPhone and Apple Mac, the Luce features smooth surfaces and minimal ornamentation, showcasing Ive's impact and signaling a shift from Ferrari's typically powerful design aesthetic.
It serves as a significant test case: Ferrari must demonstrate that an electric vehicle can align with its approach of limited availability, premium pricing, and strong emotional connection, while also broadening the lineup beyond conventional two-seat and four-seat sports cars. The vehicle's price indicates that Chief Executive Officer Benedetto Vigna has no plan to compromise the brand's exclusivity in order to increase sales volume.
The vehicle will indicate if the Italian automaker's approach is effective without the sound of a traditional engine, especially since residual values for electric vehicles remain a worry for affluent buyers looking for supercars that maintain or potentially boost their worth over time.
Lamborghini has pushed back the launch of its initial electric vehicle, illustrating the challenges luxury car manufacturers now face in convincing buyers to give up the sound and tactile experience of traditional engines. Mate Rimac, founder of the Rimac Group, mentioned last year that annual demand for high-end hypercars powered by electric systems was approximately 10 units.
Ferrari has consistently stated that it will keep providing customers with options among internal combustion, hybrid, and electric powertrains. Its approach continues to emphasize a balanced mix, customization, and careful resource management instead of prioritizing selling more vehicles.
This strict approach is fundamental to Ferrari's business strategy. Similar to successful high-end brands like Hermes International SCA and Rolex SA, the company has consistently used waiting lists and controlled availability to maintain its exclusive image. Limited availability is not an unintended consequence of the business, but rather a deliberate method Ferrari employs to boost demand and sustain prices.
The company's model has protected Ferrari from the difficulties encountered by other European car manufacturers that produce larger volumes, as they face competition from more affordable Chinese electric vehicles. The Italian firm holds the highest market value among European automakers, despite manufacturing less than 14,000 vehicles annually—significantly lower than Volkswagen AG's total of almost 9 million. Nevertheless, its stock has declined by 31% in the last 12 months due to concerns regarding the global demand for luxury goods.
Ferrari has positioned Luce not as a compromise to regulations or competitors, but as a demonstration that electric technology can offer the performance and personality that the brand's loyal fans expect. The company's message is that electrification should open up new opportunities for design and driving experiences, rather than just swapping an engine for a battery.
Ferrari Luce is not an answer to change," Executive Chairman John Elkann said to reporters during a presentation on Sunday. "It is a conscious choice to guide what lies ahead.
Read More Ferrari coverage:Ferrari selected a meaningful location for unveiling the Luce: the Vela di Calatrava, a sail-like building created by Spanish architect and engineer Santiago Calatrava, situated in the Tor Vergata area outside Rome.
The setting was appropriate for the event's magnitude. Ferrari invited over 200 journalists from across the globe to Rome for the presentation. The automaker arranged two formal dinners on Monday and Tuesday, each attended by 800 customers, according to the company. Customers were able to start placing their orders beginning on Monday.
Style Shift
The unique application of glass is among the Luce's most distinctive characteristics. Ferrari referred to it as a "glass house," a shell-shaped design that extends beneath the belt line to the car's edges. Luce is more streamlined, yet also more recognizable: its glossy, minimalist form aligns more closely with the styles that are now emerging for electric vehicles.
This increases the demand on the driving experience. Despite all the technology integrated into the Luce, it presents a relatively modest initial impression. Ferrari is counting on the vehicle's maneuverability, noise, and responsiveness while driving to achieve what its appearance alone might not: give a five-seat electric car an unmistakable Ferrari identity.
We began with Ferrari, not with electric technology," Vigna stated. "We had to start with the human aspect.
The Luce is equipped with four electric motors, one for each wheel, along with a high-voltage battery pack developed and manufactured in Maranello, Ferrari's hometown.
The electric platform enabled Ferrari to include five seats for the first time, a feature that couldn't be achieved with its conventional transaxle setup, which pairs a front-mid engine with a rear transmission. The Luce will also offer a 600-liter (21 cubic feet) trunk, providing enough room for two golf bags or three large suitcases.
The vehicle's design is more similar to high-performance electric GTs like Porsche's Taycan than to two-seat electric hypercars, although Ferrari's premium branding and limited availability make the comparison less accurate. Most Taycan models are significantly cheaper than the Luce's anticipated price.
Another major challenge is sound. Ferrari mentioned that they invested five years and conducted 40,000 kilometers of track testing to create the car's acoustic profile. Rather than digitally replicating the sound of a traditional engine, the company uses a sensor on the rear axle to capture the noise from the electric motors, then enhances and transmits the audio.
This method aims to tackle one of the key concerns regarding any electric Ferrari: whether a company known for its powerful engines can maintain an emotional bond without the noise of a traditional internal combustion engine.
--With help from Isolde MacDonogh, Blaise Robinson, and Chiara Albanese.
(Updates with analyst comment in eighth paragraph)
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