Jan 30 (Reuters) – Ford Motor Co (FN) slashed prices of its electric crossover SUV Mustang Mach-E by as much as $5,900 per vehicle on Monday, weeks after global rival Tesla Inc (TSLA.O) lowered prices of its electric vehicles reduced by as much as 20%.
Ford shares fell 1.5% at the start of trading. Tesla was flat.
The move comes as electric vehicle manufacturers feel pressure from Tesla’s price cut to respond.
“Ford just lowered Mustang EV prices in response to Tesla’s price cut. Mini price war is about to start with EVs in the US with Tesla’s shot across the bow on price cuts,” said Dan Ives, an analyst at Wedbush Securities, on Twitter.
The move will make at least one version of the Mach-E eligible again for the $7,500 tax credit, which requires the Ford EV to have an MSRP of no more than $55,000 to qualify.
Ford already planned to increase Mach-E production this year from 78,000 in 2022 to 130,000 vehicles, and said in November it would accelerate Mustang Mach-E production and target global annual production of 270,000 by the end of 2023. Ford will build the Mach-E in Mexico and China.
“Tesla’s price cut was a major blow to the prospects of competitive EV models, and the Mustang Mach-E is in direct competition with Tesla’s Model Y,” said Garrett Nelson, analyst at CFRA Research.
Ford cuts prices by up to 8% on various versions of the Mach-E, as well as the price of the extended-range battery by about 19%. The lowest priced models get smaller price cuts from $600 to $900.
Ford Chief Executive Jim Farley said on Twitter, “Scaling will reduce customer wait times. And with increased production, we are lowering costs, allowing us to share those savings with customers.”
Ford sold 39,458 Mach-Es in the United States last year, up from 27,140 in 2021.
Ford said existing Mustang Mach-E customers awaiting vehicle delivery will automatically receive the price reduction.
Reporting by David Shepardson in Washington, Joseph White in Detroit, and Aishwarya Nair and Nathan Gomes in Bengaluru; Edited by Krishna Chandra Eluri and Nick Zieminski
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