Just over six months after raising prices on the Mustang Mach-E, Ford said it would now lower prices on its flagship electric car and raise its production targets for the year.
The Mach-E drops about 5.85 percent on average, depending on the trim level. (Some versions get bigger discounts than others.) According to Marin Gjaja, chief customer officer for the Ford Model e division, the “center cut” discount was about $4,500.
Here is an overview of the new prices:
The company also said it was expanding production capacity for the Mach-E, opening up new space in its factory and adding new equipment. As such, Ford expects to produce 130,000 vehicles this year for customers in North America and Europe, up from its previous target of 78,000.
Ford is just the latest automaker to lower its EV prices. Notably, Tesla cut the prices of its popular Model 3 and Model Y vehicles by as much as 20 percent earlier this year. (The company has since raised Model Y prices slightly.) At the time, experts predicted that the price cuts could spark a price war for EVs, especially as demand for new cars weakens amid economic concerns.
“We respond to changes in the market.”
“We are responding to changes in the market,” Gjaja said in a briefing with reporters last week, citing requirements in the Inflation Reduction Act for the $7,500 EV tax credit. “We want to remain competitive in the market.”
At the moment, the only versions of the Mach-E are those qualify for the tax credit are the Select RWD and eAWD Standard Range trims, both of which fall under the $55,000 MSRP limit for non-SUVs. The IRS does not consider the Mach-E an SUV, despite Ford classifying it as such. SUVs and pickups have a higher MSRP limit of $80,000 to qualify.
Car buyers can be forgiven for feeling like they’re on a price rollercoaster given all the changes they’ve had to deal with in recent months. Last August, Ford raised prices of the Mach-E by as much as $10,000 for some trims, citing higher material costs and supply chain constraints. Now the price is falling, right on the heels of a big Tesla price cut.
Gjaja denied that the price cuts were an attempt to keep the price of the Mustang Mach-E tied to the Model Y, its closest competitor. “We have a different product, we have different customers,” he said. “We try to have an offering that we think is better than Tesla’s and then we try to adjust the price accordingly to what we think is appropriate in the market.” The Mustang Mach-E is currently the third best-selling electric car in the US, after the Tesla Model 3 and Model Y.
However, by lowering prices, Ford is going to make it more difficult for the Mach-E to become profitable. Last year, said the company’s chief financial officer that rising commodity prices due to inflation had wiped out vehicle margins.
But Gjaja claimed the Mach-E’s “cost position” was improving due to increased production and relief of some of those raw materials. “We would certainly like Mach-E to become even more profitable than it is,” he added.