Not only is Ford Motor following Tesla by getting more involved in the electric vehicle market, but it is also following the company’s move by slashing prices for its electric Mustang Mach-E crossover.
The news from Ford came on Monday, weeks after Tesla announced it was planning on slashing prices for its Model Y car by up to $13,000.
Now, the Mach-E, which was previously priced competitively with the Model Y, will see its price lowered by an average of $4,500 depending on the model, CNN reported. The automaker shared that total reductions will range from $600 to $5,900.
Marin Gjaja, the chief customer officer for Ford’s electric vehicle business, shared during a media briefing that the price cut will result in some models of the car not being profitable on a per-unit basis. However, Ford has refused to specify which Mach-E trims and models would be profitable, NBC News reported.
“We want to make money. Don’t get me wrong, we absolutely want to make money,” Gjaja said. “Believe you me, I know that we need to be trying to get more profitable because we will be publicly accountable for that number.”
Still, Gjaja says that the moves were necessary as they are adapting to the current market for electric vehicles.
“We are responding to changes in the marketplace,” Gjaja said during the press conference. “As we look and want to stay competitive in the marketplace, we’re having to respond.”
Other changes in the marketplace include a new federal electric vehicle incentive in the form of a tax credit of up to $7,500. This, paired with the Tesla markdowns, has forced Ford to respond, and Gjaja says that the automaker will do just that, as it is expected to increase Mach-E production from 78,000 vehicles to 130,000 annually.
The additional production and reduction in some commodity costs are expected to offset the profit shrink as a result of reducing the prices, Gjaja said.
Depending on the model, the Mach-E will now start at $46,000 to $64,000, according to the automaker.
Last year Ford was the second-best-selling automaker of electric vehicles, selling more than 65,000 EVs in the US. This is still miles behind Tesla, which sold an estimated 522,000 EVs in the US in 2022, CNBC reported.
Those who bought a Mustang Mach-E and are awaiting delivery will automatically see the price adjusted. While those who bought one after Jan. 1 and have already received the car will be contacted by Ford with a “private offer,” the company said.
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