Ford cuts EV prices, following Tesla
Mustang Mach-E GT will cost $5,900 less
Ford Motor said Monday it was cutting prices on its top-selling battery-powered model, the Mustang Mach-E, and was increasing production of the sport utility vehicle. It was the latest sign of intensifying competition in the electric car market.
Two weeks ago, Tesla slashed prices of its electric cars by as much as 20% in response to softening demand around the world.
The price cuts for the two most affordable versions of the Mach-E amounted to less than $1,000 each. Other models, with longer-range batteries and premium options, were reduced $3,680 to $5,900, reductions of 6% to 9%.
“We want to make EVs more accessible, so we’re increasing production and reducing prices across the Mach-E lineup,” Ford’s CEO, Jim Farley, said on Twitter. He added that “with higher production, we’re reducing costs, which allows us to share these savings with customers.”
The lowest priced Mustang Mach-E — a rear-wheel drive model with a standard battery — now has a list price of $45,995, a reduction of $900. The high-performance Mach-E GT with an extended-range battery now sells for $63,995, a cut of $5,900.
Tesla’s least expensive car is the Model 3, which is smaller than the Mustang Mach-E, and starts at $43,990. The all-wheel drive Model Y, a more direct competitor of the electric Mustang, starts at $53,490. An all-wheel drive Mustang Mach-E with comparable battery range now lists for $53,995.
Electric vehicles priced below $55,000 can qualify for federal tax credits of $7,500 that were made available starting Jan 1 under the Inflation Reduction Act. Ford’s price cuts will make more versions of the Mach-E eligible for the credit.
Ford said the new prices would automatically apply to customers who had placed orders and were waiting for their cars. Ford’s credit division is also offering subsidised interest rates of as low as 5.34% on Mach E orders placed between Jan 30 and April 3.
Tesla has long dominated the electric car market, which it largely had to itself until the past couple of years, but is increasingly encountering stiff competition. Its rate of growth has slowed in China, where it is now outsold by a local manufacturer, BYD. In addition to Ford, Volkswagen, Hyundai, Kia and other automakers have introduced electric models in the United States that are selling well and are generally cheaper than Tesla’s luxury models.
In 2022, Ford sold just under 40,000 Mach-Es, about 45% more than in 2021. That made the Mach-E the third bestselling electric model after Tesla’s Model Y and Model 3.
For much of the past two years, Tesla, Ford and other automakers raised prices of electric vehicles because demand for battery-powered cars far outstripped supply. But demand for cars and other big-ticket goods has weakened in recent months as the Federal Reserve has raised interest rates significantly. Fed policymakers are expected to slow their rate increases at their first meeting of the year today.