Ford Cuts Prices, Boosts Production Of Mustang Mach-E

The Ford Mustang Mach-E should be cheaper and more plentiful this year, the second-largest Detroit automaker promising to “significantly” boost production of the EV, even while reducing prices “across the board.”

The announcement follows Tesla’s move to cut by up to 20% the price of products like the Model Y, a direct competitor of the all-electric Mach-E SUV. And there is speculation that, after watching EV prices rise sharply last year, manufacturers could be entering a price war in 2023. Depending upon the specific trim package, Ford is bringing the price of the Mach-E down by anywhere from $600 to $5,900.

“We are not going to cede ground to anyone,” Marin Gjaja, chief customer officer at Ford’s Model e division, the side of the company focused on battery-electric vehicles, said 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.”

With the price cuts, four of the Mach-E trims will qualify for the revised federal EV tax credits by coming in at or below the $55,000 cap for clean energy sedans (it’s an $80,000 cap for bigger SUVs, vans and trucks). Previously only Ford’s base Select and rear-wheel Premium with standard range trims qualified. 

Mach-E Momentum

Launched in December 2020 as a 2021 model, the Mustang Mach-E was Ford’s first long-range all-electric vehicle and, like the more recently introduced F-150 Lightning pickup truck, demand has significantly exceeded expectations. Motorists purchased 39,458 of the electric crossovers last year, making it the third best-seller in the fast-growing U.S. EV market—though it lags well behind both the Tesla Model Y and the Model 3 sedan. 

By comparison, Ford sold only about 4,000 more gasoline-powered Mustang coupes in 2022. And company officials have suggested that they would likely sell more of the Mach-E crossovers if they had the production capacity. Just how many more should soon be tested. While the automaker is not revealing a specific plan, internal data provided by a source with deep knowledge of Ford’s production plans indicate capacity could reach 115,000 this year at a Mach-E assembly plant in Cuautitlan, Mexico. The automaker is reportedly shooting for production numbers of around 166,000 by 2025.

Keeping Up with Tesla

The price cuts should help buoy demand, analysts believe, by keeping Ford more competitive with Tesla. The EV segment leader repeatedly boosted prices last year. But it cut prices by as much as 20% this month, bringing the price of the popular Model Y Long Range as low as $52,990.

For the Mach-E, the base Select RWD standard range version comes down to a starting price of $45,995 before factoring in delivery fees and taxes, a $900 discount. At the top end, the GT extended range package drops $5,900 to $63,995.

“Ford responds to Tesla price cuts—but why?” the research team at Merrill Global Wealth Management asked in an analysis of the Detroit automaker’s Monday announcement. Since Ford says there is more demand than production capacity, that means that cutting prices “would be a direct hit to the bottom line today and unnecessarily degrades future earnings power.”

But other observers think Ford’s move is a necessary preemptive strike. EVs accounted for less than 1% of the U.S. new vehicle market in 2019. But that grew to 5% for all of 2022, and reached as high as 7% during the second half of the year. At the same time, the number of all-electric vehicle models jumped from about 15 to more than 50 over the last 24 months, with as many as two dozen more set to reach U.S. showrooms over the coming year.

“We’re seeing more competition [in the EV market] as more and more models come to market from a variety of manufacturers as everyone is increasing production capacity,” said Sam Abuelsamid, principal auto analyst for Guidehouse Insights. “That’s going to put pressure on everyone.”

Lightning Not So Lucky

While Ford is cutting prices for the Mach-E, it has repeatedly upped the MSRP for its other EV, the F-150 Lightning. At its debut, the automaker said it would go for $39,995 for the base model. That has now jumped to $46,974 before factoring in delivery fees, taxes and other charges. The top-of-the-line F-150 Lightning Platinum package now tops $100,000 when fully loaded.

Ford and Tesla aren’t the first to cut prices on some of their EV models. As demand has slowed over the past few years, Nissan has trimmed the sticker on the Leaf, the industry’s first mainstream electric vehicle. And General Motors ordered a sharp cut for both the Chevrolet Bolt EV and Bolt EUV models last year (but then scaled back the discount in early 2023) to help kick-start momentum after the two models were briefly pulled from production due to battery fire problems.