Ford Motor Co said on Monday it would lower the price of its best-selling battery-powered Mustang Mach-E and increase production of the sport utility vehicle. It’s the latest sign of increased competition in the EV market.
The move comes about two weeks after Tesla slashed prices on its electric vehicles by as much as 20% in response to weak global demand.
The two most affordable versions of the Mach-E are both marked down by less than $1,000. Other models with longer-range batteries and premium options are down $3,680 to $5,900, or 6 percent to 9 percent.
“We want to make electric vehicles more accessible, so we’re increasing production and lowering prices across the Mach-E family,” said Ford CEO Jim Farley. tweetedHe added, “As production ramps up, we are reducing costs, which allows us to share those savings with our customers.”
The lowest-priced Mustang Mach-E—the rear-wheel-drive model with the standard battery—now has a sticker price of $45,995, a $900 price cut. The high-performance Mach-E GT with the range-extending battery is now $63,995, a $5,900 price reduction.
Tesla’s cheapest car is the Model 3, which is smaller than the Mustang Mach-E and starts at $43,990. The more direct competitor to the electric Mustang is the all-wheel-drive Model Y, which starts at $53,490. An all-wheel-drive Mustang Mach-E with comparable battery range is now listed at $53,995.
Electric vehicles priced under $55,000 are eligible for a $7,500 federal tax credit, available Jan. 1. 1 Under the Reducing Inflation Act. Ford’s price cut will make more versions of the Mach-E eligible for the credit.
Ford said the new prices will automatically apply to customers who have placed an order and are waiting to purchase a vehicle. Ford’s credit arm is also offering a subsidized rate as low as 5.34% on Mach E orders placed between Jan. 17-12. 30 and 3 April.
Tesla, which has long dominated the electric vehicle market and largely on its own until recent years, is facing increasing competition. Its growth rate in China has slowed, and it is now outsold by local manufacturer BYD. In addition to Ford, car companies such as Volkswagen, Hyundai, and Kia have launched electric models in the United States. Sales are good, and prices are generally lower than Tesla’s luxury models.
In 2022, Ford sold nearly 40,000 Mach-Es, an increase of about 45% over 2021. That makes the Mach-E the third best-selling electric vehicle after Tesla’s Model Y and Model 3.
Tesla, Ford and other automakers have raised prices on electric vehicles for much of the past two years as demand for battery-powered vehicles far outstrips supply. But demand for cars and other big-ticket items has weakened in recent months as the Federal Reserve has sharply raised interest rates. Federal Reserve policymakers are expected to slow the pace of rate hikes at their first meeting of the year on Wednesday.