Ferrari Launches Most Polarizing Vehicle in History -- It's Time to Buy the Stock

Ferrari (NYSE: RACE) found itself in an interesting spot when it came to full-electric vehicles (EVs). One could argue the supercar maker, known for its racing heritage, was in a great position as its pricing power should enable its EVs to be instantly profitable unlike the vast majority being produced now.

However, Ferrari had to protect the emotional experience that consumers have with driving its supercars; the rumble of a V8 or V12 engine, the exhaust tones, and the dynamic agility that might be compromised with bulky EV battery technology. For those reasons, among others, Ferrari had delayed its first full EV, choosing to push hybrids instead.

Now the time has come, and Ferrari's first all-electric vehicle, named Luce, guarantees to be polarizing for both investors and consumers.

Uncertainty remains

Make no mistake, Ferrari is taking a risk launching the Luce, especially considering Lamborghini canceled its full-electric vehicle plan set to launch in 2030, noting there's almost no market for electric supercars currently.

Image source: Ferrari.

"A lot of people won't admit that, but a lot of these CEOs know there's no market for these pure EV, high-end supercars." Karl Brauer, executive analyst for iSeeCars, told CNBC.

Ferrari has backed off its initial ambitious EV plans, noting back in October that it now expects EVs to make up roughly 20% of its sales, about half of what it previously expected. Further, Ferrari delayed plans for its second EV model until at least 2028. If the Luce were to launch with very little demand, it could have significant impact on Ferrari's impeccable brand that consistently ranks among the top across the globe.

That said, if any automaker can pull this off, it's certainly the iconic Italian supercar maker. "Ferrari has been one of the most successful companies in Europe, period," said RBC Capital analyst Tom Narayan, according to CNBC. "Not even in autos, just in general. It's been a smashing success."

This development also needs context. Consider that Ferrari sells only roughly 14,000 vehicles annually, and keeps a lid on its book order to keep exclusivity high, and supply just short of demand to support its pricing power and lucrative margins. In that reality, Ferrari only needs to sell between 500 and 1,000 Luce EVs annually for it to be a success, and that should be easily achievable for a company that has people lining up out of the door and waiting on long lists to get their hands on anything Ferrari.

What it all means

The highly anticipated, and likely polarizing, Ferrari Luce is also a notable departure from typical designs and the shock factor contributed to Ferrari stock's roughly 6% decline after the unveiling. In fact, this year has presented savvy long-term investors with a rare opportunity to start a position in the automaker that typically trades at sky-high valuations.

RACE PE Ratio data by YCharts

However, investors should note that Ferrari's consumer base may be more ready to adopt its full-EVs. Consider that in 2025, 42% of its global shipments were hybrids. Investors should also take the initial decline of Ferrari stock with a grain of salt, because consumers and traditionalists hate change; Ford Motor Company saw this exact scenario years ago with its iconic Mustang Mach-e, which was initially met with massive resistance and "hate," only for it to eventually outsell the traditional gasoline-powered Mustang.

There's certainly a downside if the Luce were to completely flop with Ferrari's consumer base, but even that speed bump wouldn't break the automaker, which is valued more like an ultra-luxury brand, rather than a traditional automaker. Further, Ferrari's earnings before interest, taxes, depreciation, and amortization (EBITDA) margins check in near 40%, has a history of robust shareholder returns, boasts unmatched pricing power and a fortress of an economic moat built from decades of racing heritage and technology filtering to its supercars.

In all likelihood, when the dust settles from the Luce unveiling, Ferrari will keep winning, and so will long-term investors.

Daniel Miller has positions in Ford Motor Company. The Motley Fool has positions in and recommends Ferrari. The Motley Fool has a disclosure policy.