Ford Slashes Electric Mustang’s Price in Response to Tesla
Ford Motor Co. is slashing the price of its electric Mustang Mach-E by an average of $4,500 in response to Tesla Inc.'s own recent cuts, stepping up the price wars in a slowing EV market.
The discount comes on a model that Ford has already described as unprofitable, but the automaker said it hopes to offset further margin deterioration by boosting production 67% this year.
The move, along with discounted financing rates as low as 5.3% on the Mach-E, is meant to counter Tesla's decision to cut prices across its lineup by as much as 20%. It also brings the Mach-E in line with new caps on EV prices to qualify for federal tax credits of up to $7,500 under the Inflation Reduction Act. The fight to win over buyers comes as analysts predict the pace of growth for EVs will slow this year.
“Our competitors are also adjusting their prices,” Marin Gjaja, chief customer officer for Model e, Ford's EV unit, told reporters. “As we look and want to stay competitive in the marketplace, we're having to respond.”
Ford's shares pared a dip as low as 2.4% to trade down 1.4% to $13.08 as of 11:19 a.m. in New York. Investors are bracing for a price war as other EV makers are likely to follow suit to keep their vehicles competitive.
“We expect more price cuts to come,” Tom Narayan, an analyst with RBC Capital Markets, wrote in a note to investors Monday. “The Tesla cuts in our view will and have started to create a cascading effect.”
The lowest priced Mach-E now starts at $45,995, down $900, while the most expensive GT Extended Range version falls $5,900 to start at $63,995. The California Route 1 extended range version, meanwhile, is marked down almost 9% to start at $57,995.
Chief Financial Officer John Lawler said in June that
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