People visit the Ford Mustang Mach-E all-electric SUV at the 2019 Los Angeles Auto Show in Los Angeles, the United States, on November 22, 2019.
Xinhua via Getty Images
DETROIT — Ford motor is ramping up production and cutting prices for its Mustang Mach-E electric crossover, just weeks after the industry leader Tesla has announced similar plans for its electric cars.
The Detroit automaker said Monday it will drop prices on the Mach-E, which is comparable to the Tesla Model Y, by an average of about $4,500, depending on the model. The discounts range from $600 to $5,900, compared to Tesla’s price cut of up to $13,000 on the Model Y earlier in January.
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Wall Street analysts and investors have largely welcomed Tesla’s price cuts as a way to boost demand and boost sales, despite concerns that the move would dent some profits. Analysts expected Tesla’s cuts to put pressure on other automakers to lower their own prices.
In Ford’s case, the price cuts will mean that not all trim-based Mach-E models will be profitable on a per-unit basis, according to Marin Gjai, chief customer officer for Ford’s electric vehicle division. He said Mach-E production is expected to increase from 78,000 vehicles to 130,000 units per year.
“We are responding to changes in the market,” Jaya said during a media briefing, citing new federal incentives for electric vehicles and Tesla’s price cuts. “As we look and want to remain competitive in the market, we have to react.”
Ford expects to offset some of the profit reduction with improved costs from additional production, as well as lower costs for some raw materials, according to Gjai. The starting price of the Mach-E will now range from about $46,000 to $64,000. Tesla’s Model Y starts at around $53,500 to $57,000 without any options.
Last year, the Mach-E led Ford to become the second-best selling electric vehicle manufacturer in the US, albeit behind Tesla by a wide margin. Last year, Ford sold more than 65,000 electric vehicles in the US. Motor Intelligence estimates Tesla, which does not report sales by region, will sell more than 522,000 electric vehicles in the U.S. in 2022.
Ford said existing Mustang Mach-E customers awaiting delivery of their vehicle will automatically receive the adjusted price. For customers who purchased one of the vehicles after Jan. 1 and have already received their Mustang Mach-E, Ford will make a “private offer,” the company said.
In addition to the adjusted price, Mustang Mach-E vehicles ordered between January 30 and April 3 will be eligible for special pricing with Ford Credit starting at 5.34%.
Ford declined to comment on which Mach-E trims and models will be profitable after the price cuts. The company is expected to begin separately reporting financial results for its electric car business, known as Model e, later this year.
“We want to make money. Don’t get me wrong, we absolutely want to make money,” Giagea said. “Trust me, I know we need to try to become more profitable because we’re going to be publicly accountable for that number.”
To increase production of the Mach-E, Ford is upgrading the plant in Mexico where the cars are made. It is expected to be back online next month, Ford said.
