Ford cuts the price of the EV Mustang Mach-E, following Tesla’s cut
People visit Ford’s all-electric SUV Mustang Mach-E at the 2019 Los Angeles Auto Show in Los Angeles, the United States, on November 22, 2019.
Xinhua via Getty Images
DETROIT — Ford Motor is ramping up production and cutting prices of its electric Mustang Mach-E crossover, weeks behind the industry leader Tesla announced similar plans for its electric cars.
The Detroit automaker said Monday it will drop the price of the Mach-E, which is comparable to Tesla’s Model Y, by an average of about $4,500, depending on the model. The reductions range from $600 to $5,900, compared to Tesla’s price cuts of up to $13,000 on the Model Y earlier in January.
Wall Street analysts and investors largely applauded Tesla’s price cuts as a way to boost demand and boost sales, despite concerns that the move would erode some of its profits. Analysts expected Tesla’s cuts to put pressure on other automakers to cut their own prices.
In Ford’s case, the price cuts will mean that not all Mach-E models, based on trim, will be profitable per unit, according to Marin Gjaja, customer manager in Ford’s electric vehicle business. He said Mach-E production is expected to increase from 78,000 cars to 130,000 units annually.
“We are responding to changes in the market,” Gjaja said during a media briefing, referring to new federal EV incentives and Tesla’s price cuts. “As we look and want to be competitive in the market, we have to respond.”
Ford expects to offset some of the profit shrinkage with cost improvements thanks to the additional production as well as a reduction in some raw material costs, according to Gjaja. The Mach-E’s starting price will now range from around $46,000 to $64,000. Tesla’s Model Y starts at around $53,500 to $57,000, without any options.
The Mach-E led to Ford becoming the second best-selling electric car manufacturer in the US last year, albeit behind Tesla by a good margin. Ford sold more than 65,000 electric cars in the US last year. Motor Intelligence estimates that Tesla, which does not report sales by region, sold more than 522,000 electric cars in the US in 2022.
Ford said existing Mustang Mach-E customers awaiting delivery of the vehicle will automatically receive the adjusted price. For customers who purchased one of the vehicles after Jan. 1 and have already received their Mustang Mach-E, Ford will be reaching out with a “private offer,” the company said.
In addition to the adjusted price, Mustang Mach-E vehicles ordered between January 30 and April 3 will be eligible for special rates with Ford Credit as low as 5.34%.
Ford declined to comment on which Mach-E trims and models would be profitable after the price cuts. The company is expected to begin reporting financial results separately for its electric car business, known as Model e, later this year.
“We want to make money. Don’t get me wrong, we absolutely want to make money,” Gjaja said. “Believe me, I know we have to try to be more profitable because we will be publicly accountable for that number.”
To increase Mach-E production, Ford is upgrading the factory in Mexico where the vehicles are made. It is expected to come back online next month, Ford said.
