CNN
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Ford is ramping up production of its popular Mustang Mach-E electric SUV and slashing the sticker price weeks after Tesla has lowered the prices of its cars. The move represents a significant slowdown in price increases Ford announced last summer for 2023 models – but buyers may still pay a bit more than before the increases.
The Mustang Mach-E, a midsize electric family SUV, was the Dearborn, Michigan-based automaker’s first serious electric effort. Priced and aimed squarely at the Tesla Model Y, which has its own starting price of $53,490, the Mach-E is Ford’s bet to get new car buyers to dip their toes into a battery-powered future. it has since been joined in Ford’s electric lineup by the workhorse Ford F-150 Lightning. But the company still sees the Mach-E as a crucial step for the company’s electric drive growth.
Late last year, Darren Palmer, Ford’s vice president of electric vehicle programs, told CNN Business that The Mach-E was completely sold out and the automaker was delaying its launch in more global markets to catch up with demand in the US.
“We can sell it at least two or three times as much,” he said at the time.
The price cuts announced by Ford on Monday were biggest for the most expensive versions of the SUV, just as the increases were biggest for those models. The base sticker of the Mustang Mach-E GT Extended Range, a high-performance version of the SUV, dropped to about $64,000 from $69,900 previously, a decrease of $5,900. But that model was around $62,000 before the price hike last August.
When it announced those price hikes, Ford also said it was putting more standard features into the vehicles, including advanced driver assistance features.
The price of the cheapest Mach-E, the standard rear-wheel-drive model, was cut by $900, going from about $46,900 to $46,000. The price of the range-extended battery option itself dropped from $8,600 to $7,000.
Tesla announced price cuts of up to 20% on its electric vehicles earlier this month after raising prices in 2022.
When Ford announced the price hike last summer, citing supply chain issues, the automakers indicated they would continue to monitor market conditions for the next model year.
Ford announced last summer that it was ramping up production of the Mach-E as it added capacity for more battery production. The automaker also announced in late August that it was reopening Mach-E order banks that had been closed as the company worked to fill existing orders.
Customers who complete the transaction for their Mach-E after today’s announcement will pay the new lower price, Ford said. Ford will contact Mach-E customers with a sales date after January 1, 2023, who already have their vehicles, directly. the automaker said.
At least some versions of both models are currently eligible for federal electric vehicle tax credits, according to the Internal Revenue Service, but both are treated as cars, not SUVs, under tax rules unless equipped with a third row seats.
That means tax credits are only available for the two-row Mach-E and two-row Model Y only if the sticker price is under $55,000. For Model Y versions with a third row of seats, a $4,000 option, buyers can get tax credits with a price on the sticker up to $80,000. A third row of seats is not available for the Mustang Mach-E.
The final amount of the tax credit may depend on when the vehicle is actually delivered to the customer and also whether the customers themselves meet the annual income requirements.
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