On the heels of massive price cuts across the board by Tesla, Ford today cut prices of its Mustang Mach-E by as much as $5,900 in some cases. In a tweet this morning, Ford's CEO Jim Farley mentioned the price cuts along with an increase in production for the brand's best selling electric vehicle.
"At Ford, we want to make EVs more accessible, so we’re increasing Mustang Mach-E production & reducing prices across the Mach-E lineup," Farley said, "Scaling will shorten customer wait times. And with higher production, we’re reducing costs, which allows us share these savings with customers."
Ford ended 2022 with a production rate of roughly 78,000 Mach-E vehicles and plans to ramp production up to a rate of more than 130,000 units annually by the end of 2023. However, not every Mach-E model will bring profits for the company. During a media briefing, Ford's Chief Customer Officer for electric vehicle business, Marin Gjaja, explained that the price cuts will mean that some Mach-E trim levels will fall below a profitable point on a per-unit basis. However, cutting prices was a move that Ford needed to take if they want the Mustang Mach-E to stay competitive.
"We are responding to changes in the marketplace,” Gjaja said during a media briefing, “As we look and want to stay competitive in the marketplace, we’re having to respond.”
The company expects to make up for the loss of profits through the scaling of production and reduction of supply costs for materials. As production increases, the cost per-unit should drop.
The 2023 Mach-E prices now start at roughly $46,000 to $64,000, placing it firmly in the midst of the competition from Tesla, Hyundai, Kia, and others.
2023 Mustang Mach-E Updated Pricing
Source: Ford Motor Co., *MSRP: Manufacturer Suggested Retail Price
While these price changes affect future customers, existing customers who recently purchased (after Jan. 1, 2023) a Mach-E won't be left out to dry. According to the company, representatives will reach out to these customers with a "private offer" to quell any ill will. Customers currently awaiting delivery will automatically receive the adjusted prices.
There was no indication from Ford about which specific trim levels would or would not be profitable after these price cuts. The company had previously reported last year that they were struggling to produce the Mach-E profitably.
“We actually had a positive bottom line profit when we launched the Mach-E, commodity costs have wiped that out,” Chief Financial Officer John Lawler said in June 2022. Before the end of last year, Ford even raised prices for the Mach-E to offset the rising cost of materials.
“We want to make money. Don’t get me wrong, we absolutely want to make money,” Gjaja said. “Believe you me, I know that we need to be trying to get more profitable because we will be publicly accountable for that number.”