Ferrari’s stock price fell after the EV was released. Don’t ‘worry too much’: City

ferrariThe company’s stock price plummeted after it unveiled its first fully electric car, which drew criticism from the company’s former boss and even Italy’s transport minister.

The company’s shares fell more than 8% on Tuesday after the company unveiled its 550,000 euro (about $640,000) Luce, Ferrari’s first five-seater car. Milan-listed stocks rose more than 2% at one point on Wednesday morning, but ended slightly lower.

However, auto analysts downplayed the market’s negative reaction, saying, “It’s too early to be overly concerned.”

Ferrari CEO Benedetto Vigna told CNBC that the announcement was a “very important day” that symbolized “a new chapter” in the company’s history.

But many criticized Luce’s unconventional design, with some questioning whether EVs could dilute a business’ return on investment.

Analysts at RBC Capital Markets pointed to investor concerns that “Luce’s design, which prioritizes aerodynamics over downforce, could weigh on residual value.”

“That said, we recall that investors expressed similar concerns when the Purosangue was announced in 2022. Since then, the model has become one of Ferrari’s best sellers, with demand outstripping supply,” they said in a research note on Tuesday.

The Purosangue appeared to be a departure from the company’s long-standing vow to never build SUVs. The company called it FUV, or “Ferrari Utility Vehicle.”

“Although Luce’s design departs from Ferrari tradition, the company has demonstrated that the driving experience remains true to the Ferrari brand,” RBC Capital Markets said in a note.

Analysts added that the company “may limit Luce sales volumes to maintain exclusivity, but initial demand for the vehicle is an important indicator for investors to monitor. We reiterate that it is too early to worry too much, especially whether the design will appeal to new (potentially Chinese) customers.”

William Li, CEO of Chinese electric car maker Nio, said Ferrari’s design had always led the market, adding that Luce had its own “distinctive characteristics”.

“You have to see it on the ground. In many cases, you can’t just see videos and photos,” Li told reporters in Beijing on Thursday, according to CNBC’s translation of his remarks in Mandarin.

“I also watched the video (of the Pope test driving the car), and when I compared it to the other videos, it felt different,” Lee said. “You can only feel it when it’s moving.”

Deliveries to customers are expected to begin in the fourth quarter. Ferrari announced that it has chosen to develop and manufacture all components at its factory in Maranello, Italy. The design was handled by LoveFrom, an agency founded by former Apple design chief Jony Ive.

Former Ferrari chairman Luca di Montezemolo, who held various leadership positions at Ferrari over the decades until 2014 and is currently a director of rival McLaren Group Holdings, said Luce was a disgrace to the company’s storied history.

“I want the prancing horse logo removed from that car,” he said on the sidelines of a business meeting in Rome, according to Reuters.

Ferrari declined to comment. McLaren builds competing supercars, invests heavily in hybrid technology, and also competes with Ferrari in F1.

Italy’s Deputy Prime Minister and Transport Minister Matteo Salvini also criticized Luce, calling it “exorbitantly expensive.”

“From an aesthetic point of view, that speaks for itself… it looks completely different from the Prancing Horse car. And this is supposed to be an ‘innovation’. Who knows what[Ferrari founder]Enzo Ferrari will say,” he wrote in X on Tuesday.

Automotive analysts at Citi said Ferrari’s Luce launch highlighted the risks of transitioning to electric vehicles among ultra-wealthy customers, while luxury car rivals such as Bentley, Lamborghini and Aston Martin have all delayed the launch of battery electric car models.

“This has already had some impact on valuation multiples, which are also weighed down by lower five-year EPS growth expectations. Nevertheless, as highlighted by Ferrari, global auto demand is becoming bifurcated between ICE and BEV technologies, even outside EU CO2 emissions regulations,” they said in a research note on Wednesday.

“Even Ferrari cannot buck this trend forever. It remains to be seen whether LUCE’s timing and appeal will solve Ferrari’s BEV transition problem at this point. Ferrari’s revenue will still be driven by ICE products for the foreseeable future,” they added.

—CNBC’s Evelyn Cheng, Michael Wayland and Robert Frank contributed to this report.

Disclosure: CNBC is a sponsor of McLaren Racing.