Ford is joining Tesla in slashing the prices of its most popular electric vehicle model, the Mustang Mach-E.
With price cuts ranging from 1.2% to 8.8% of the current MSRP, Ford aims to increase sales while simultaneously increasing production to 130,000 units per year.
Ford executives admit that some of these price cuts won’t be profitable per unit, although this strategy could help Ford retain or even grow its EV market share.
Dearborn’s best-selling electric vehicle, the Ford Mustang Mach-E, is emblematic of the company’s transition into the electric vehicle market. Despite its initially controversial Mustang nameplate, the crossover has largely been a success for Ford, with sales figures posting 45.4% growth in 2022. This equates to 39,458 Mach-E units sold in 2022, with Ford selling 61 575 electric vehicles in total (including F-150 Foudres and E-Transits).
This puts Ford in second place for electric vehicle sales, leaving a significant margin between it and the main shareholder, Tesla. Even with such drastic margins between Ford and Tesla, with more than a million units difference, Ford seems ready to fight. At least that’s what its new EV strategy signals, as the Mustang Mach-E receives a significant price cut for 2023 while the company also ramps up production.
Ford is offering up to $5,900 off its Mach-E lineup, with the GT trim dropping from $71,195 to $65,495, including a $1,500 destination and delivery charge for the entire model. Not all versions will receive such steep price cuts. At the lower end, Select RWD Standard Range models are only $900 less, while Select eAWD Standard Range only receives a $600 price cut. That means the cheapest Mustang Mach-E available, the standard Select RWD line, will start at $47,495.
The California Route 1 eAWD Extended Range models received the second largest price cut, with a $5580 cut bringing its MSRP to $59,495. Both Premium trim models also received price reductions, with the RWD model slashing $3980 while the AWD version dropped just under $3680 from its MSRP. Ford has even made the extended-range battery a bit cheaper, now priced at $7,000 as opposed to the previous price of $8,600.
Ford says customers with existing orders for the Mach-E, or those who purchased a Mach-E in January, will be credited for the new price. Additionally, Mustang Mach-Es ordered between January 30 and April 3, 2023 may be eligible for special interest rates as low as 5.34% from Ford Credit.
With the price cut intended to boost Ford sales, it’s easy to see the parallel between Ford’s strategy and Tesla’s recent price cuts. This strategy has paid off for Tesla in the short term, with sales surging and Tesla shares even receiving upgrades from Wall Street as a result. After being undermined by Tesla, particularly with deep price cuts for its rival Mach-E Model Y crossover, Ford’s price-cutting response could foster a potential electric vehicle price war.
In fact, Ford’s electric vehicle business chief customer officer, Marin Gjaja, said these price cuts won’t allow some Mach-E models to be profitable on a per-unit basis, CNBC reports. This indicates that Ford is ready to temporarily lose even more money per electric vehicle to maintain the Mach-E’s place as the third most popular electric vehicle model in the United States. Even so, Ford’s planned production increase from 78,000 vehicles to 130,000 units per year could offset this loss in profitability per unit, as the former automaker remains determined to unseat Tesla.
“We’re not going to give ground to anyone. We’re producing more electric vehicles to reduce customer wait times, offer competitive pricing, and work to create an unparalleled ownership experience,” said Marin Gjaja. “Our customers are at the center of everything we do – as we continue to build exciting and exciting electric vehicles, we will continue to push the boundaries to make electric vehicles more accessible to everyone.”
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