Ford Motor Co (F.N) on Monday slashed prices of its electric crossover SUV Mustang Mach-E by as much as $5,900 per vehicle, weeks after rival Tesla Inc (TSLA.O) cut prices worldwide on its electric vehicles by as much as 20 percent.
Shares of Ford closed down 2.9 percent in above-average trading to $12.89. Tesla slipped 6.3%. The move occurs as electric vehicle manufacturers are facing pressure from Tesla’s price cut to respond.
“Ford just cut Mustang EV prices in response to Tesla’s price cut. Mini price war about to begin 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 more version of the Mach-E again qualify for a $7,500 federal tax credit, which requires the Ford EV to have a proposed retail price of below $55,000 to qualify.
Ford had already planned to ramp up Mach-E production this year at its facility in Mexico to 130,000 vehicles from 78,000 last year, and said in November it was speeding up Mustang Mach-E production and targeting global annual production rate of 270,000 by the end of this year including its China production.
Ford makes the Mach-E in China and Mexico.
“Tesla’s price cut was a major blow to the prospects of competing EV models and the Mustang Mach-E directly competes with Tesla’s Model Y,” said Garrett Nelson, an analyst at CFRA Research.
Ford is slashing prices by up to 8% on several versions of the Mach-E, along with reducing the price of the extended-range battery by around 19%. The lowest-priced models are getting smaller $600 to $900 price cuts. The Ford price cuts only affect North American prices.
Ford Chief Executive Jim Farley said on Twitter, “scaling will shorten customer wait times. And with higher production, we’re reducing costs, which allows us to share these savings with customers.”
Ford sold 39,458 Mach-Es in the U.S. in 2022, an increase from 27,140 the prior year.
General Motors (GM.N) said Monday it had no plans to alter prices in response to others. The Detroit automaker in June slashed prices on the Bolt by about $6,000 and by as much as 18 percent for the lowest-price version and earlier in January the vehicle qualified for the $7,500 federal tax credit.
Ford said existing Mustang Mach-E buyers awaiting delivery of vehicles will certainly receive the price cut.