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Ford discounts its all-electric Mustang Mach-E in response to Tesla's EV price war

Ford said Monday it has increased production and cut the price of its all-electric Mustang Mach-E crossover, the latest automaker to join an EV price war started by Tesla.

Ford Mustang Mach-E vehicles are now between about 1% to 8.8% lower, depending on the trim level, according to the company, which emphasized that the discounts are possible now that its new EV supply chain is coming online and production is "significantly increasing."

“We are not going to cede ground to anyone. 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,” Marin Gjaja, the chief customer officer of Ford Model e, said in a statement. “Our customers are at the center of everything we do – as we continue to build thrilling and exciting electric vehicles, we will continue to push the boundaries to make EVs more accessible for everybody.”

Ford mustang mach-e price 2023
Ford mustang mach-e price 2023

Image Credits: Ford

Those lowered prices will also extend to existing customers awaiting delivery of their vehicle, the company said. Ford said it will reach out to customers who purchased the Mustang Mach-E after January 1, 2023 and already have taken possession of the vehicle. The move is clearly aimed at distinguishing itself from rival Tesla. Some new Tesla owners, particularly in China, have demanded rebates or credit after the company slashed prices.

Tesla has discounted its vehicles, or offered credits, at least four times in the past several months, kicking off what many in the industry have dubbed an EV price war. The price reduction trend kicked off in October when Tesla announced price cuts in China up to 9% on the Model 3 and Model Y.  Tesla reduced prices for Chinese buyers in January by nearly 14% and as much as 20% for vehicles sold in North America.

The company has also tried to woo U.S. and Canadian buyers with price reductions. Tesla in early December offered U.S. buyers a $3,750 credit toward a Model Y or Model 3 if they had their vehicle delivered in December 2022. In the last week of the year, the automaker upped that discount to $7,500, according to the company’s website.

Tesla's decision to drop the price of its EVs, which some analysts have suggested was due to softening demand, has put pressure on the rest of the industry. Tesla has among the highest profit margins in the business, allowing it to experiment with price changes. It's also the EV sales leader.

Those two factors mean that most, if not all, automakers making a run at Tesla will also lower prices of their EV models.