Ford cuts price of Mustang Mach-E electric car after Tesla cuts
People visit the all-electric Ford Mustang Mach-E SUV at the 2019 Los Angeles Auto Show in Los Angeles, USA on November 22, 2019.
Xinhua via Getty Images
DETROIT – Ford Motor boosts production and cuts prices of its Mustang Mach-E electric crossover, weeks after industry leader Tesla announced similar plans for its electric vehicles.
The Detroit automaker said Monday it will cut prices on the Mach-E, which is comparable to the Tesla Model Y, by about $4,500 on average, depending on the model. The price cuts range from $600 to $5,900 compared to Tesla’s $13,000 price cut for the Model Y earlier in January.
Wall Street analysts and investors have generally welcomed Tesla’s price cuts as a way to stimulate demand and increase sales, despite fears that the move will hurt profits. Analysts had expected the Tesla cuts to force other automakers to lower their own prices.
In Ford’s case, price cuts will mean that not all trim-based Mach-E models will be profitable on a unit basis, according to Marin Gyaja, chief account manager for Ford’s electric vehicle division. He said Mach-E production is expected to increase from 78,000 vehicles to 130,000 units a year.
“We are responding to changes in the market,” Gyaja said during a media briefing, referring to new federal incentives for electric vehicles and Tesla price cuts. “As we look and want to remain competitive in the marketplace, we must respond.”
Gyaji said Ford expects to offset some of the profit cuts through higher costs through additional production, as well as cuts in some commodity costs. Mach-E starting price will now range from $46,000 to $64,000. Tesla’s Model Y starts at $53,500 to $57,000 without any options.
Mach-E allowed Ford to become the second best-selling electric vehicle automaker in the US last year, albeit by a wide margin over Tesla. Ford sold more than 65,000 electric vehicles in the US last year. Tesla, which does not report sales by region, has sold more than 522,000 electric vehicles in the US in 2022, Motor Intelligence estimates.
Ford said existing Mustang Mach-E customers waiting for delivery of their car will automatically receive the adjusted price. For customers who bought one of the vehicles after January 1 and have already received their Mustang Mach-E, Ford will make a “private offer,” the company said.
In addition to adjusted pricing, Mustang Mach-Es ordered between January 30 and April 3 will be eligible for special Ford Credit rates of just 5.34%.
Ford declined to comment on which trim levels and Mach-E models would become profitable after the price cuts. The company is expected to start separately reporting the financial results of its electric vehicle business, known as Model e, later this year.
“We want to make money. Don’t get me wrong, we absolutely want to make money,” Gyaja said. “Trust me, I know that we need to try to get more profit because we will be held publicly accountable for this figure.”
To increase production of the Mach-E, Ford is upgrading the plant in Mexico where the cars are made. It is expected to return to the network next month, Ford said.