Ford cuts its Mustang Mach-E prices by an average range of about $4,500, depending on the model. The reductions range from $600 to $5,900, which could be compared to Tesla price cuts of up to $13,000 on its Model Y in January. According to Wall Street analysts and investors say that Tesla’s price reductions could drum up EV prices and also push EV sales.
While sales are expected to increase, concerns about profits remain. Analysts expected Tesla’s cuts to put pressure on other automakers to cut their own prices. In Ford’s case, the price cuts will mean not all Mach-E models, based on the trim, will be profitable on a per-unit basis, according to Marin Gjaja, chief customer officer of Ford’s electric vehicle business. He said Mach-E production is expected to increase from 78,000 vehicles to 130,000 units annually.
“We are responding to changes in the marketplace,” Gjaja said during a media briefing, referencing new federal EV incentives and Tesla’s price cuts. “As we look and want to stay competitive in the marketplace, we’re having to respond.” Ford expects to offset some of the profit shrink with cost improvements thanks to the additional production as well as a reduction in some commodity costs, according to Gjaja. The Mach-E’s starting price will now range from about $46,000 to $64,000. Tesla’s Model Y starts at about $53,500 to $57,000, without any options.
EV deliveries
As for the new Mustang Mach-E prices, Ford says existing customers awaiting delivery will receive the new prices. As for customers with a sales date after January 1st of this year that has already received their vehicle, Ford says it will reach out directly for a possible price adjustment. Finally, though Ford said it was “significantly increasing production” of the Mustang Mach-E, the automaker did not say how many more vehicles it would produce compared to what the company was planning to build in 2023. Last year Ford sold 39,458 in the U.S., a 45% jump compared to the year prior.
“We want to make money. Don’t get me wrong, we absolutely want to make money,” Gjaja said. “Believe me, I know that we need to be trying to get more profitable because we will be publicly accountable for that number.” To increase Mach-E production, Ford is upgrading the plant in Mexico where the vehicles are made. It is expected to come back online next month, Ford said. The price decline anticipates that other automakers also sell EVs at a lower price. Thus bringing higher competition for those automakers making cheaper EVs.