Tesla’s surprise decision to slash the price of some of its vehicles by 20% earlier this month is starting to have a ripple effect at other automakers.
Ford, on Monday, announced it would lower the price of its Mustang Mach-E electronic vehicle by an average of $4,500 per car. (Actual reductions will range from $600 to $5,900.)
That’s notably less than the $13,000 discounts Tesla announced on its Model Y earlier this month, but it’s still a way to spur consumer interest in the relatively new category. And Ford vehicles will still cost considerably less than Model Y base models. In conjunction with the price cut, Ford also said it would increase capacity on the Mach-E line by two-thirds, upping production from 78,000 vehicles per year to 130,000.
While the price cuts could generate new interest in EVs, they will cut into profits for both automakers (and any others who follow suit in the days and weeks to come). Ford did not specify which models would remain profitable after the pricing adjustments.
“We are not going to cede ground to anyone,” said Marin Gjaja, chief customer officer at Ford Model e in a statement. “We are producing more EVs to reduce customer wait times, offering competitive pricing, and working to create an ownership experience that is second to none.”
While Tesla customers who recently bought a Model Y were upset by the price cuts, as they paid thousands of dollars more just days earlier and have not been offered any sort of compensation for that, Ford hopes to avoid that backlash. The automaker says anyone who is waiting on a Mach-E or who ordered one after Jan. 1 of this year will receive the adjusted price. The company is also offering special interest rates for buyers.
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