Ford Motor Co. will slash the price of its top electric vehicle, the Mustang Mach-E, after Tesla announced a series of major price cuts earlier this month.
Ford on Monday announced price cuts ranging from $600 to $5,900 on certain Mach-E models. The American automaker added that it will “significantly” increase production of the electric SUV to reduce customer wait times and boost its market share.
“We are not going to cede ground to anyone. We are producing more EVs to reduce customer wait times, offering competitive pricing and working to create an ownership experience that is second to none,” Marin Gjaja, Ford’s chief customer officer for EVs, said in a statement.
Ford’s price drop comes just a few weeks after Tesla, the EV market leader, slashed the price of some of its vehicles by up to 20 percent. That allowed certain Tesla models to get under the new EV tax credit’s price threshold.
The move indicates that automakers are aggressively courting consumers as EVs gain traction in the U.S.
The Mustang Mach-E was the third best-selling EV in the U.S. last year. But while Tesla has steadily ceded market share to competitors, it still accounted for nearly two-thirds of EV sales in 2022.
“The increasingly competitive pricing for electric vehicles could prolong Ford’s timeframe for a meaningful contribution from its electric vehicle offering to profitability, and underlines the need to reduce vehicle costs through lower battery costs and manufacturing efficiencies, in addition to higher production rates,” Moody’s analyst Rene Lipsch said in a note.
An EV price war would be good news for consumers. The price of new cars, and EVs in particular, skyrocketed during the pandemic amid supply chain snags and persistent demand.
The average EV sold for around $61,400 last month, according to an analysis from Kelley Blue Book, down 5.5 percent from November.