On Monday, Ford Motors announced it was cutting prices on its top-selling battery-powered vehicle, the Mustang Mach-E. They also said they will be increasing the production of the sport-utility vehicle. This is just one of the few signs of ever-intensifying competition in the EV market. This move comes about 2 weeks after EV giant, Tesla slashes their prices on electric cars by as much as 20 percent on some models. This was to soften demand around the world.
Specifics of Price Reductions
Ford lowered the price of the two most affordable versions of the Mach-E by less than $1000. However, other more expensive models with longer-range batteries and premium options were reduced to $3,680 from $5,900, reductions of 6% to 9%, respectively. “We want to make E.V.s more accessible, so we’re increasing production and reducing prices across the Mach-E lineup,” Ford’s chief executive, Jim Farley, said on Twitter. He added that “with higher production, we’re reducing costs, which allows us to share these savings with customers.”
Tesla vs. Ford
The least expensive model Tesla offers is the Model 3, which has a similar price point to the Mach-E starting at $43,900. However, the all-wheel drive Model Y, which is a more direct competitor to the Mach-E, starts at $53,490. The all-wheel drive Mach-E with a comparable battery range is listed for $53,995. As part of the Inflation Reduction Act, electric vehicles priced below $55,000 are eligible for federal tax credits of $7,500. As a result of Ford’s price cuts, more Mach-E models will be eligible for the tax credit.
Competition for Tesla
In the past couple of years, Tesla dominated the electric car market, but it now faces stiff competition. The company’s growth rate has slowed in China, where it has been overtaken by BYD. 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.
2022 saw Ford sell just under 40,000 Mach-E’s which is a 45% increase from the prior year. That made the Mach-E the third best-selling EV after Tesla’s Model Y and Model 3.
Wrap Up
For most of the last couple of years, EV manufacturers have been raising the prices for their EVs because of the demand for battery-powered cars. However, that has since changed with the demand for cars as well as other big-ticket goods weakening over the last few months. If you are thinking about going electric, make sure you get in touch with a trusted financial professional before you buy to see if you can take advantage of potential tax credits that are being offered.