Ford Motor announced Monday that it is reducing prices on its best-selling battery-powered model, the Mustang Mach-E, and increasing production of the SUV. It was the latest sign of intensifying competition in the electric car market.
The move will take place about two weeks later Tesla lowered the prices of its electric cars by up to 20 percent in response to slowing global demand.
Ford slashed the price of the two most affordable versions of the Mustang Mach-E by less than $1,000. Other models with longer-range batteries and premium options were reduced by $3,680 to $5,900, a reduction of 6 to 9 percent.
“We want to make electric vehicles more accessible, so we’re increasing production and lowering prices across the Mach-E lineup,” said Ford CEO Jim Farley. said on Twitter. He added that “with higher production, we’re reducing costs, which allows us to share those savings with customers.”
The most affordable Mustang Mach-E — a rear-wheel-drive model with a standard battery — now has a list price of $45,995, a $900 reduction. The high-performance Mach-E GT with an extended-range battery now sells for $63,995, a $5,900 discount.
Tesla’s most affordable 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 to the electric Mustang, starts at $53,490. An all-wheel drive Mustang Mach-E with comparable battery range is now $53,995.
EVs priced under $55,000 may qualify for $7,500 in federal tax credits made available beginning January 1 under the Inflation Reduction Act. Ford’s price cuts will make more versions of the Mach-E eligible for credit.
Ford said the new prices would automatically apply to customers who had placed orders and were waiting for their cars. Ford’s credit department is also offering subsidized interest rates as low as 5.34 percent on Mach E orders placed between January 30 and April 3.
Tesla has long dominated the electric car market, which it largely held to itself until the last few years, but is increasingly facing stiff competition. Its growth rate has slowed in China, where it is now sold by a local manufacturer, BYD. In addition to Ford, Volkswagen, Hyundai, Kia and other automakers have introduced electric models in the US, which are selling well and are generally cheaper than Tesla’s luxury models.
In 2022, Ford sold almost 40,000 Mach-E, around 45 percent more than in 2021. This made the Mach-E the third best-selling electric model after Tesla’s Model Y and Model 3.
For the past two years, Tesla, Ford, and other automakers have largely hiked electric vehicle prices because demand for battery-powered cars far outstripped supply. But demand for cars and other big commodities has weakened in recent months as the Federal Reserve hiked interest rates significantly. Fed policymakers are expected to slow rate hikes at their first meeting of the year on Wednesday.
