The electric-vehicle wars are heating up in a pretty interesting way.
After Tesla dropped some EV prices by up to 20 percent, Ford is announcing price cuts of its own. The Mustang Mach-E, the American marque’s flagship EV, is seeing its price decrease by an average of 5.85 percent, The Verge reported on Monday. Some versions are seeing a cut of almost $6,000, while others are seeing a more modest $600 or $900 drop.
“We are responding to changes in the marketplace,” Marin Gjaja, the chief customer officer for Ford’s Model E division, said in a briefing with reporters last week. “We want to stay competitive in the marketplace.”
The move comes just six months after Ford raised prices for the Mustang Mach-E. Back in August, some trims went up as much as $10,000, thanks to supply-chain issues and increased material costs. Gjaja denied that the new cuts are an attempt to keep the Mach-E in line with Tesla’s Model Y, its biggest competitor. Ford’s EV is currently the third-highest-selling electric vehicle in the country, behind Tesla’s Model 3 and Model Y.
“We have a different product, we have different customers,” Gjaja said. “We try to have an offering that we think is better than Tesla’s and then we try to price accordingly to what we think is appropriate in the market.”
While the lower price might encourage more consumers to buy a Mach-E, it could make it more difficult for the vehicle to become profitable. But Ford seems to be optimistic. Along with the announcement of the price cuts, the automaker said it would be expanding production capacity for the Mach-E. By opening up more space in its factory and adding new equipment, the company expects to make 130,000 vehicles for North American and European customers this year, almost double its previous target of 78,000.
Gaja said that increased output is likely to help the Mach-E reach profitability, despite the price cuts. Helped along by commodity prices coming down, the car’s overall “cost position” is improving, he claimed.
Whether increase production and lower prices will translate into increased revenue for Ford remains to be seen. But one thing is certain; it will be a little bit easier to snap up a Mach-E and lower price going forward.