Jan 30 (Reuters) – Ford Motor Co (FN) On Monday it cut the price of its electric crossover SUV Mustang Mach-E to $5,900 per vehicle, weeks after rival Tesla Inc. (TSLA.O) It has cut the price of its electric vehicles globally by up to 20%.
Shares of Ford fell 2.9% to $12.89 in mid-day trading. Tesla fell 6.3%.
The move comes as electric vehicle manufacturers feel pressured by Tesla’s price cuts.
“Ford has cut Mustang EV prices in response to Tesla’s price cuts. A mini price war with EVs will begin in the U.S., starting Tesla’s shot at Tesla’s price cuts,” Dan Ives, an analyst at Wedbush Securities, said on Twitter.
The move would make at least one additional version of the Mach-E eligible again for a $7,500 federal tax credit, which requires a Ford EV to have a suggested retail price of more than $55,000 to qualify.
Ford had already planned to increase Mach-E production at its plant in Mexico this year from 78,000 to 130,000 vehicles in 2022, and in November it said it would accelerate production of the Mustang Mach-E and aim for a global annual production rate of 270,000 by the end of 2023. including its Chinese production.
Ford builds the Mach-E in Mexico and China.
“Tesla’s price cut is a big blow to its chances of competing in EV models, and the Mustang Mach-E competes directly with Tesla’s Model Y,” said Garrett Nelson, an analyst at CFRA Research.
Ford is slashing the price of various versions of the Mach-E by up to 8%, and cutting the price of the extended battery by around 19%. Low-cost models receive small price cuts of $600 to $900. Ford’s price cuts only affect North American prices.
Ford Chief Executive Jim Farley tweeted, “Scale will reduce customer wait times. And through higher production, we’re reducing costs, allowing us to share these savings with customers.”
Ford sold 39,458 Mach-Es in the U.S. last year, up from 27,140 in 2021.
General Motors (GM.N) Others on Monday said they had no plans to adjust prices. In June, the Detroit automaker cut Bolt prices by about $6,000 and up to 18% for the lowest-priced version, and earlier this month the vehicle qualified for a $7,500 federal tax credit.
Existing Mustang Mach-E customers waiting for delivery of their vehicles will automatically receive the price reduction, Ford said.
Reporting by David Shepherdson in Washington, Joseph White in Detroit, and Aishwarya Nair and Nathan Gomez in Bangalore; Editing by Krishna Chandra Elluri, Nick Zieminski and Christian Schmolinger
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