Ford is now reducing its prices on its Mustang Mach-E electric SUV as high as $6,000, according to a report by AP on Monday, Jan. 30.
(Photo : FREDERIC J. BROWN/AFP via Getty Images)
The Ford Mustang Mach-E GT SUV on display at the Los Angeles Auto Show in Los Angeles, California on November 17, 2021.
Small Pricing War for EVs
The company has ramped up its production of the Mach-E this 2023 while using reduced expenses to lower the pricing of its product. The move follows EV giant Tesla's announcement that it will reduce prices by 6% to 20% in the US for most of its models in hopes that it will boost demand and market share.
Jeff Schuster, president of global forecasting for consulting firm LMC Automotive, told AP that Ford's move will most likely prompt other automakers to cut down their prices, as well as ignite a small pricing war for electric cars.
He said that if other companies want to remain price competitive in the market, they must be willing to cut down on their prices as well.
But at the same time, Schuster does not predict an all-out price war that would drastically lower the prices of several EV models. Instead, automakers will likely protect their profit margins in the competitive EV market.
Keeping the Mach-E Competitive
The price reductions, according to Ford, are a part of the company's strategy to keep the SUV competitive in a rapidly evolving market.
A base rear-wheel-drive standard range Mach-E will cost $900 less, dropping from $46,895 to $45,995. The most expensive GT extended model will drop by $5,900, from $69,895 to $63,995. Shipping, taxes, and other costs are not included in the prices.
Tesla reduced the costs of its electric car models on Jan. 13, making some of them eligible for a brand-new federal tax credit that may help increase consumer interest.
For some versions of the Model Y SUV, which is its best-selling product, the business reduced pricing in the United States by about 20%. More Model Y models will now qualify for the $7,500 electric car tax credit, which will be offered through March.
Additionally, Tesla decreased the basic price of its least expensive vehicle, the Model 3, by nearly 6%.
The reductions were made in light of waning demand and a falling stock price for Tesla. CEO Elon Musk claimed that the move will result in higher sales, with 1.8 million vehicles delivered this year, which would be a 40% increase from 2022 if his projections come true.
Meanwhile, Ford explained that its pricing reductions are intended to increase the appeal of Mach-E to EV buyers and increase the automaker's market share.
Nissan, which competes with the Ariya and Leaf in the US told AP that it has no immediate plans to reduce prices following Ford's move.
The Chevrolet brand of General Motors, which will have four EV model lines available for purchase by the end of 2023, said it has no upcoming price announcements as well.
Customers who have ordered Mach Es and are waiting for delivery will immediately receive the reduced prices, according to Ford. People who already own cars with a sale date after Jan. 1 will be contacted directly by the company.
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