Ford is slashing prices on its 2023 all-electric Mustang Mach-E to about $8,100 as the automaker tries to shed inventory and compete with Tesla and its increasingly cheap EVs.
The overall market share of new EV sales has grown, reaching nearly 8% in the U.S. in 2023. But as market share has expanded, the consumer base has shifted from early adopters to the early majority — a group unwilling to pay a EV premium, Ford CFO John Lawler told TechCrunch in an interview earlier this month.
The price cuts come after the Mach-E lost eligibility for a $3,750 tax credit and sales of the all-electric SUV fell 51% in January compared to the same month in 2023. Overall EV sales fell 11% from January of last year.
The Detroit Free Press previously reported the new priceswhich were sent to the car industry’s dealer network.
Ford confirmed with TechCrunch the price cuts, which apply only to 2023 model year Mustang Mach-E vehicles and range from $3,100 to $8,100. Ford Credit is also offering a few deals, including 0% financing for 72 months for qualified buyers and a $7,500 cash incentive for those who lease. This extra incentive is on top of the tax credit that Ford Credit already passes on to consumers.
“The Mustang Mach-E is America’s No.2 EV SUV in 2023 and Ford is America’s No.2 EV brand,” Ford spokesman Marty Günsberg wrote in an emailed statement. “We are adjusting pricing for MY23 models as we continue to adapt to the market to achieve the optimal mix of sales growth and customer value.”
Image Credits: Passage
Automakers, including Ford, have struggled to compete with Tesla amid softening demand for high-priced electric vehicles.
“Tesla brought up the 3 and the Y at the same time, which we think created a false sense of demand,” Lawler said. “They were two new vehicles that were now in a segment where they were affordable for early adopters and supply was very limited. And so then you had this incredible growth, but their production was limited. And so there seemed to be this incredible demand, but they were early adopters.”
Lawler said that when Tesla started dropping prices, the conventional wisdom was that the company was trying to disrupt the industry and “keep everyone else out.” Instead, he saw Tesla as responding to the same changing market conditions.
Tesla spent the second half of 2022 and all of 2023 studying the price of its four models: the Model S, Model X, and the popular Model 3 and Model Y vehicles. The company, which does not use a dealership model and instead sells directly to consumers, cut prices every quarter last year — a tactic that has boosted sales and cut profits.
Tesla shipped a record number of electric vehicles in the fourth quarter, helping it reach 1.81 million deliveries in 2023. Operating income also took a hit due to increased R&D costs, Cybertruck growth and continued price cuts for the best sales of the vehicles, the Model 3 and the Model Y.
