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Ford Cuts Prices for the Mach-E With Higher Production Numbers Excuse – What About Profit?

If Tesla were fishing to catch competitors with its price reduction strategy, it would be happy to learn that at least a few took the bait. Kia said it would never reduce the prices of its current EVs – which have a long waiting line for them – and that this “blunt” measure would probably hurt residual values. However, Ford decided it could also reduce prices for the Mustang Mach-E.
Ford Mustang Mach-E got cheaper even without making a profit: that's the Tesla effect 23 photos
Photo: Ford/edited by autoevolution
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The automaker’s excuse to do so was that its “new EV supply chain” was coming online, which allowed it to significantly increase the electric SUV production. In other words, Ford could cut the price tags because higher production numbers made the vehicles cheaper. As hard as it is to believe with increasing raw material prices, Ford also confessed its main motivation: “to keep the SUV competitive in a rapidly changing market.” In other words, to follow Tesla.

The most affordable Mach-E now costs $45,995. The Select RWD Standard Range used to cost $46,895, so the discount was $900. The Select eAWD Standard Range had an even smaller rebate: $600, making the price drop from $49,595 to $48,995. But there are more meaningful price reductions.

The largest one was $5,900. It covers the Mach-E GT Extended Range, which used to cost $69,895 and now can be bought for $63,995. In second place comes the California Route 1 eAWD Extended Range derivative, with a price decrease of $5,580 – from $63,575 to $57,995. Finally, we have the Premium Standard Range trims: the RWD saved its customers $3,980 (from $54,975 to $50,995), and the eAWD spares $3,680 (from $57,675 to $53,995).

Like Rich Benoit warned about Tesla’s price strategy, it seems that Ford is also just giving the Mach-E price tags it used to have. What we mentioned about Tesla’s prices is also valid for Ford: raw material costs do not justify price reductions. On the contrary: crucial elements are only seeing their prices go up. Ford should reduce profits in the Mach-E for the lower prices to make sense, but Marin Gjaja told Automotive News that the company does not make money with its electric SUV.

Ford’s Chief Customer Officer said that the price reduction helps the automaker bring in new customers and hone its software and battery technology with this strategy. Unlike Tesla, Ford has no problems admitting it is buying market share. The difference is that the American EV maker claims to have massive profits with its vehicles. Ford is using the profits from combustion-engined products to feed its strategy with the Mach-E. Whether this is an investment in the future or just a blunt move – as Kia said Tesla’s price reduction was – is something we will have to wait to figure out.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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