Ford follows Tesla in EV price cut

Ford Motor said Monday it is cutting prices on its best-selling battery-powered model, the Mustang Mach-E, and increasing production of the sport utility vehicle. It was the latest sign of increased competition in the electric car market.

The move comes about two weeks after Tesla slashed prices for its electric cars by up to 20% in response to falling demand around the world.

Price reductions for the two most affordable versions of the Mach-E were less than $1,000 each. Other models with longer-range batteries and premium options were discounted from $3,680 to $5,900, or reductions of 6% to 9%.

“We want to make electric vehicles more accessible, so we’re increasing production and lowering prices across the Mach-E lineup,” Ford chief executive Jim Farley said. said on Twitter. He added that “with higher production, we reduce costs, which allows us to share these savings with customers.”

The cheapest Mustang Mach-E — a rear-wheel-drive model with a standard battery — now has a list price of $45,995, down $900. The high-performance Mach-E GT with an extended-range battery now sells for $63,995, down from $5,900.

Tesla’s cheapest 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 life now costs $53,995.

Electric vehicles priced below $55,000 may qualify for federal tax credits of $7,500 that were made available beginning Jan. 1 under the Reducing Inflation Act. Ford’s price cuts will make more versions of the Mach-E eligible for the credit.

Ford said the new prices would automatically apply to customers who had placed orders and were waiting for their car. Ford’s credit division is also offering subsidized interest rates as low as 5.34% on Mach E orders placed between Jan. 30 and April 3.

Tesla has long dominated the electric car market, which it had largely to itself until the past two years, but is increasingly coming up against fierce competition. Its growth rate has slowed in China, where it is now overtaken by a local manufacturer, BYD. In addition to Ford, Volkswagen, Hyundai, Kia and other automakers have introduced electric models to the United States that sell well and are generally less expensive than Tesla’s luxury models.

In 2022, Ford sold just under 40,000 Mach-Es, about 45% more than in 2021. This made the Mach-E the third best-selling electric model after the Model Y and Model 3 of You’re here.

For much of the past two years, Tesla, Ford and other automakers have raised prices for electric vehicles as demand for battery-powered cars far outstrips supply. But demand for cars and other big-ticket goods has weakened in recent months as the Federal Reserve has raised interest rates significantly. Fed policymakers are expected to slow their rate hikes at their first meeting of the year on Wednesday.