Ferrari reverses after controversial EV announcement
U.S. car manufacturers have learned a valuable lesson about electric vehicles over the past couple of years: American consumers don't like expensive EVs.
That's why Ford is still pushing hard for EVs despite the $19.5 billion in losses it was recently forced to write down in its electric vehicle division. The company says its entire strategy is out of whack and that EVs under $30,000, like those built by Chinese automakers, such as NIO, are the future.
Luxury Italian automaker Ferrari (RACE) didn't get that memo. The company's stock tanked 4.3% shortly after the opening on Tuesday morning as investors digested Luce, its upcoming EV offering.
Ferrari unveiled the four-door, five-seater on Monday. The EV was developed with the help of former Apple design chief Jony Ive, who is credited with designing Apple's first iPhone.
The car is a sharp contrast to Ferrari's history. When most people think of Ferrari, they think of two-seater sports cars like the 360, 250 GTO, and the Testarossa, not family vehicles with enough space for 2.5 children.
However, the Maranello Marque is going in a different direction with its next-gen vehicle, but the timing and pricing are leaving investors scratching their heads about who exactly this prohibitively expensive vehicle is for.
Photo by EThamPhoto on Getty Images
Ferrari stock takes a tumble after revealing Lucero EV
As one might expect, 87-year-old Ferrari introduced the next generation of its iconic luxury vehicles at the iconic Vela di Calatrava - Citta dello Sport arena in Rome.
Despite the extra doors and seats, Ferrari says the Luce, which translates to "light" in Italian, is still a sports car with four electric traction motors and the kind of performance you would expect from a Ferrari. The electric engines feature electrically controlled active suspension and four-wheel steering to ensure the vehicle still feels like a Ferrari.
"The Ferrari Luce name evokes clarity and direction. It lights the way towards the future and defines the intent to create a Ferrari 360°, not merely the "electric Ferrari" but an entirely new Ferrari, designed for deeper engagement and performance, with a unique and recognizable character," the company said Monday.
The company says it engineered, developed, and manufactured the vehicle's main components, including the electric engines and battery pack, in-house to ensure quality.
And all of that care and precision is going to cost you. The Ferrari Luce will retail for an eye-watering 550,000 euros ($640,000) once deliveries begin in the fourth quarter this year.
That price point may be what's causing the stock to tumble, as Ferrari could soon find out what non-luxury automakers have learned in recent years. For them, cheaper is better.
Luxury EVs dominate the market, but the tide is shifting
Tesla focused on the luxury market when it first started delivering the Model S and Model X over a decade ago, but the company didn't really take off until it developed more affordable, mass market versions of those vehicles in the Model 3 and Model Y.
Today, Tesla has stopped producing the Model S and Model X, so it can focus on its more profitable, cheaper models.
A lower-cost model is needed for Tesla to stay competitive in markets like China and Europe, where pricing wars are intense, Tesla investor and Camelthorn Investments adviser Shawn Campbell recently told U.S. News & World Report.
Tesla isn't the only EV maker making the shift. Ford, GM, and Stellantis have all admitted that their EVs cost too much, leading to the low volume that is making their operations unprofitable.
"The vast majority of EVs sell at a rate of far less than 2,000 units a month, or 6,000 units a quarter. In the volume-driven business of automotive manufacturing, low volume is the enemy; EV profitability remains a distant dream for nearly every automaker," Cox Automotive said last year.
Ford seems to be the most proactive of the group, looking to build EVs that cost under $30,000. Two years ago, Ford announced plans to reduce its EV production capacity by 35%, and Farley said last year that "the really high-end EVs, the $50k, $60k, $70k EVs just weren't selling."
Meanwhile, GM CEO Mary Barra called EVs the company's "North Star" amid its own billion-dollar losses.
Despite the shifting sands, the global luxury EV market was still estimated at $192 billion last year and is expected to grow to $215 billion this year, according to Global Market Insights.
But China and the U.S. are the leaders of that global market, and both countries are experiencing a shift in how they view luxury EVs, which could make it tough for Ferrari to find a market for its latest niche offering.
So investors may be reacting to that reality as Ferrari stock tumbles on Tuesday.
Related: GM, Ford, Stellantis CEOs go back to the drawing board with EVs
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This story was originally published May 26, 2026 at 8:47 AM.