Growing competition in the EV market is obliging carmakers to slash prices and compete for customers.
1. Fords vs Tesla
Elon Musk’s Tesla is the undisputed leader in the electric vehicle (EV) segment, with cars sold in Europe, China, and the US. In 2022, Tesla delivered 1.3 million vehicles globally, even after registering 40% growth. But the game is on for Musk who is starting to face competition from Ford Motor Company. Following the market demand, Ford has formally entered the price war in the EV market by cutting prices of its models and engaging with the market leader, Tesla, which also announced price cuts earlier this month, according to Business Insider.
The growing competition is leading to a poorer performance for carmakers in the EV space, with brands like Ford and General Motors making a splash with electric models of their legacy cars. Recognizing the threat, Tesla slashed car prices by up to 20% across its popular cars, Model 3 and Model Y, which is expected to dip its revenues by $7 billion next year. Nonetheless, Ford has responded.
2. Ford Match-E
So, how much will a Ford Mach-E cost with the cut in prices? The price reductions announced by Ford vary by trim level and performance packages. According to Business Insider, standard Mach-E starts at $45,995 and receives a $900 discount, while the highest discount of $5,900 is offered on the Mach-E GT with an extended range. Owners who are currently on the waitlist for delivery of their Mach-E will also benefit from a price reduction. Customers who have already received deliveries of their Mach-E’s can also expect an offer that will refund the difference they have paid for their cars, Marin Gjaja, chief customer officer at Ford Electric division told reporters.
3. Price war
While Tesla’s move is expected to help the carmaker protect its customer base in the face of rising competition and perhaps even increase its market share, Ford does not enjoy the same liberties, offering thinner margins than those of Musk’s. In such a scenario, engaging in a price war could see Ford’s profits being wiped off completely.
“At Ford, we want to make EVs more accessible, so we’re increasing Mustang Mach-E production and reducing prices across the Mach-E lineup. Scaling will shorten customer wait times. And with higher production, we’re reducing costs, which allows us to share these savings with customers,” Ford’s CEO Jim Farley wrote on Twitter.
Ford’s announcement has one more benefit as the reduced prices also allowed Ford’s cars to become eligible for tax credits of up to $7,500, which under new regulations, had price caps.