Just weeks after Tesla decided to lower the price of its EVs in the US and Europe, Ford has decided to increase production and lower the price of its flagship electric SUV in order to remain competitive in the electric vehicle industry.
Ford Chief Customer Officer Marin Gjaja declared, “We are not going to cede ground to anyone.” “We are producing more EVs to decrease customer wait times, offering competitive pricing and aiming to provide a second-to-none ownership experience,” the company claims.
Following Tesla’s announcement earlier this month that it would reduce prices by up to a fifth across the US and Europe in order to boost demand for its cars despite an economic slowdown and more competition in the sector, Ford has made a similar move for its Mustang Mach-E SUV.
Dan Ives, an analyst at Wedbush, stated that “it’s the beginning of a price war that Tesla launched a few weeks ago, and Ford will sacrifice margins to obtain more volume.” It’s an EV arms race right now, so Ford needs to be proactive and not worry about margins in the short run.
Tesla in the US announced price reductions of up to $13,000 across its entire model lineup in January. In October and once more in the beginning of January, the firm decreased the cost of its vehicles in China. Mercedes-Benz was forced to reduce the price of some of its electric cars in response to the actions, and some Tesla customers also voiced their displeasure with the price reductions.
Depending on the model and battery, Ford announced price reductions on the Mustang Mach-E that range from $600 to $5,900.
The firm claimed that this was done to “help reduce customer wait times and to take advantage of reduced expenses to cut pricing across the board.” Ford’s pricing reductions were a direct response to those of its electric vehicle competitors, according to Ives, who claimed that the Mustang Mach-E is a direct challenger to Tesla’s Model Y SUV.
The increased pricing, according to Ford, is part of its strategy “to keep the SUV competitive in a fast changing market” and will help it maintain its position as the second-largest US producer of EVs. Tesla is at the top.
The full-size truck, SUV, and van production of Ford, based in Dearborn, Michigan, will also increase. Ives predicted that additional price reductions will occur throughout the year from both Ford and other EV manufacturers. “This is a window of opportunity because the demand for electric vehicles is about to skyrocket.
Because of price, these automakers don’t want to lose customers, Ives said. Customers who have already ordered and are waiting for the Mustang Mach-E will immediately be charged the reduced price.
Since only a small number of players control the market for electric cars, it is classified as an oligopoly market.
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