Ferrari shares experienced a significant decline on Tuesday following the official unveiling of the Luce, the luxury automaker’s first fully electric vehicle. The stock dropped approximately 8% in Milan and 4% on U.S. exchanges, reflecting investor apprehension regarding the brand’s pivot toward electrification. The Luce, which carries a price tag of roughly 550,000 euros ($640,000), represents a major strategic shift for the Maranello-based manufacturer, which has long been defined by its high-performance combustion engines.

CEO Benedetto Vigna characterized the launch as a pivotal moment for the company, emphasizing that the vehicle was designed with respect for both the new technology and the brand’s heritage. The five-seater model, which boasts a 0-60 mph time of 2.5 seconds and a top speed of 192 mph, features a design developed in collaboration with LoveFrom, the agency founded by former Apple design chief Jony Ive. Despite the technical specifications, the market reaction has been lukewarm, with some analysts pointing to a combination of design criticism and the high research and development costs associated with the transition to electric power.

Industry experts suggest that the negative market sentiment stems from concerns that the move toward EVs could dilute the prestige of the Ferrari brand. While competitors like Porsche and Lamborghini have slowed their own electric vehicle initiatives due to softening global demand, Ferrari is moving forward with in-house manufacturing for the Luce. Deliveries are expected to commence in the fourth quarter, leaving investors to weigh the potential for long-term innovation against the immediate risks to the company’s profit margins and brand identity.