"Congratulations on the Mach E! Sustainable / electric cars are the future! Exciting to see this announcement from Ford, as it will encourage other automakers to go electric as well," Musk wrote on Twitter.
The new Mustang appears to be an attempt by Ford to take on Tesla, and it will directly compete with the upcoming Tesla Model Y SUV.
With production on the Model Y scheduled to begin in the summer of 2020, Tesla may have a small head start on Ford, as the Mustang Mach-E is expected to be available next fall
CNN's Peter Valdes-Dapena and Chris Isidore contributed to this report.