Ford Motor said Monday it would cut prices on its best-selling battery-powered model, the Mustang Mach-E, and increase production of the sport utility vehicle. It was the latest sign of intensifying competition in the electric car market.
Two weeks ago, Tesla cut prices for its electric cars by up to 20 percent in response to declining demand around the world.
Price cuts for the two most affordable versions of the Mach-E amounted to less than $1,000 each. Other models, with longer battery life and premium options, were cut from $3,680 to $5,900, reductions of 6 to 9 percent.
“We want to make electric vehicles more affordable, so we are increasing production and lowering prices across the entire Mach-E lineup,” said Ford CEO Jim Farley, said on Twitter. He added that “with increased production, we are reducing costs, which allows us to share these savings with customers.”
The lower-priced Mustang Mach-E, a rear-wheel-drive model with a standard battery, now has a list price of $45,995, a reduction of $900. The high-performance Mach-E GT with an extended-range battery now sells for $63,995, down from $5,900.
Tesla’s least expensive 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 a comparable battery range is now priced at $53,995.
Electric vehicles priced below $55,000 may qualify for federal tax credits of $7,500 that became available starting January 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 cars. Ford’s credit division is also offering subsidized interest rates as low as 5.34 percent on Mach E orders placed between January 30 and April 3.
Tesla has long dominated the electric car market, which it largely had to itself until the last few years, but it’s finding itself with increasingly stiff competition. Its growth rate has slowed in China, where it now outsells 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 cheaper than Tesla’s luxury models.
In 2022, Ford sold just under 40,000 Mach-Es, about 45 percent more than in 2021. That made the Mach-E the third best-selling electric model after Tesla’s Model Y and Model 3.
For much of the past two years, Tesla, Ford and other automakers have raised prices for electric vehicles because demand for battery-powered cars far outstripped supply. But demand for cars and other expensive goods has weakened in recent months as the Federal Reserve raised interest rates significantly. Fed policymakers are expected to cut their rate hikes at their first meeting of the year on Wednesday.
