Ferrari’s stock tanked after launching its first-ever EV. What’s going on?

Ferrari’s stock tanked nearly eight per cent Tuesday morning, one day 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 have almost always been exclusively gas-powered.

So what’s going on?

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 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 sort of become an electric [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 a little bit of jitters through some investors.”

Winder adds that a similar situation happened several years ago when Harley-Davidson launched an electric motorcycle, which led to some backlash from those who felt the brand wasn’t synonymous with anything but gas-powered models.

This eventually led Harley-Davidson to rebrand its electric offerings as Live Wire.

In Ferrari’s most recent earnings report from this month, CEO Benedetto Vigna suggested the Luce represented the brand’s evolution from traditional concepts.

“The Ferrari Luce brings together so much extraordinary technologies and the passion of so many people,” he said. “It is 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 negative reactions to the design. One user described it as “one of the ugliest EV designs ever.”

Winder says Ferrari may be looking to appeal to 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 growing segments of the market for emerging customers, they risk losing out on those customers as they develop and move further down the life cycle,” he says.

“But if they innovate too quickly or they get it wrong, the design’s wrong, or they’re too radical, where they’re adding too many differences, then they could risk alienating not only the new consumer.

“Because no one wants to buy a car that people are dissing online.”