Ford slashes Mustang Mach-E price, call it Tesla effect
Ford Motor Company on Monday slashed the pricing of its Mustang Mach-E electric crossover by $5,900 for each unit, reports Reuters. This comes following the rival Tesla's consecutive price cut of its vehicles by as much as 20 per cent globally. This move indicates how electric vehicle manufacturers, including legacy players like Ford, are feeling pressure from Tesla's price cut. This move will make at least one additional version of the Ford Mustang Mach-E again eligible for a $7,500 federal tax credit, as it requires the Ford EV to have a retail price lower than $55,000 to be eligible.
Besides price reduction, Ford has also planned to increase the production of Mustang Mach-E significantly in 2023 at its plant in Mexico, claims the report. It says the US auto major aims to increase the production of this electric crossover from 78,000 units in 2022 to 130,000 units in the Mexico plant this year to grab more market share. Also, the total output of this EV would be 270,000 units globally by the end of 2023, claims the report.
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The automaker has cut prices of Mustang Mach-E by eight per cent on various versions. It also cut the price of the extended-range battery by around 19 per cent. Regarding this decision and production hike, Ford CEO Jim Farley wrote on Twitter that scaling would shorten customer wait times. “And with higher production, we're reducing costs, which allows us to share these savings with customers," he wrote further.
Ford is feeling the heat of the Tesla effect, as the latter has substantially increased its production of EVs and reduced its pricing as well in a bid to lure more buyers. This is driving Ford to ramp up its production of Mustang Mach-E in China and Mexico. Apart from production hikes, a mini price war too is about to begin, and Ford's price reduction for the Mustang Mach-E is just a part of that, feels analysts. As the report cited a CFRA Research analyst, Tesla’s price cut was a major blow to the prospects of competing EV models, and the Mustang Mach-E comes as a direct competitor against Tesla’s Model Y.