Ford Motor Co. on Monday said it is cutting prices on its best-selling battery-powered model, the Mustang Mach-E, and ramping up production of the sport-utility vehicle. It’s the latest sign of intense competition in the electric car market.
The move comes after about two weeks Tesla has slashed the price of its electric cars 20 percent to soften demand worldwide.
The price cut for the two most affordable versions of the Mach-E was less than $1,000 each. Other models with longer-range batteries and premium options were cut from $3,680 to $5,900, down 6 percent to 9 percent.
“We want to make EVs more accessible, so we’re increasing production and lowering prices across the Mach-E lineup,” said Jim Farley, Ford’s chief executive. He said on Twitter. “With more production, we reduce costs, which allows us to share these savings with customers,” he said.
The least-expensive Mustang Mach-E — the rear-wheel-drive model with a standard battery — is now $900 off the $45,995 price tag. The high-performance Mach-E GT with extended battery now sells for $63,995, a $5,900 reduction.
Tesla’s least expensive car is the Model 3, which is smaller than the Mustang Mach-E and starts at $43,990. The electric Mustang’s direct competitor, the all-wheel drive Model Y, starts at $53,490. An all-wheel drive Mustang Mach-E with comparable battery range now lists for $53,995.
Electric vehicles costing less than $55,000 may qualify for a $7,500 federal tax credit available starting Jan. 1 under the Inflation Reduction Act. Ford’s price cuts make several versions of the Mach-E eligible for the credit.
Ford said the new prices will automatically apply to customers who have ordered and are waiting for their cars. Ford’s credit arm is also offering subsidized interest rates of 5.34 percent for Mach E orders placed between January 30 and April 3.
Tesla has long dominated the electric car market, largely until the past two years, but faces increasingly stiff competition. Its growth rate has slowed in China, where it is now sold by local manufacturer BYD. Besides Ford, Volkswagen, Hyundai, Kia and other automakers have introduced electric models in the U.S. that sell well and are generally cheaper than Tesla’s luxury models.
In 2022, Ford sold 40,000 Mach-Es, a 45 percent increase over 2021. This made the Mach-E the third best-selling electric model after Tesla’s Model Y and Model 3.
Over the past two years, Tesla, Ford and other automakers have raised the prices of electric vehicles as demand for battery-powered cars outstripped supply. But demand for cars and other big-ticket items has weakened in recent months as the Federal Reserve raised interest rates significantly. Fed policymakers are expected to reduce their rate hikes at their first meeting of the year on Wednesday.