In a move aimed at boosting sales and challenging Tesla’s dominance in the electric vehicle market, Ford Motor Company (F) has announced a price reduction for its popular Mustang Mach-E SUV. The 2025 model year Mustang Mach-E will start at $36,495, marking an 8.8% decrease from the 2024 model’s starting price.
This price cut comes on the heels of Ford’s decision to manufacture batteries for the Mach-E at LG Energy Solution’s Michigan facility starting in 2025. This shift from Poland to Michigan aligns with the company’s strategy to capitalize on the US Inflation Reduction Act (IRA), which offers significant tax credits and grants for clean energy initiatives.
The IRA’s incentives play a key role in Ford’s pricing strategy. The 2025 Mustang Mach-E, with its US-made batteries, will be eligible for a $7,500 EV tax credit, further reducing the cost for eligible buyers. In contrast, the 2024 model, due to the use of imported parts, misses out on this tax credit.
This aggressive move highlights Ford’s commitment to gaining a foothold in the booming EV market. The Mach-E was Ford’s best-selling electric vehicle in the US during the third quarter of 2023, with 13,392 units sold, representing 57% of its total EV sales. This strong performance even placed the Mach-E as the second best-selling electric SUV in the US, trailing only Tesla’s Model Y.
Despite the encouraging sales figures, Ford’s EV segment, known as Model E, continues to grapple with financial challenges. The company anticipates a loss of $5 billion to $5.5 billion within the EV segment for the entire year. However, Ford’s bold pricing strategy and commitment to local production suggest a determined push to make the Mach-E a major contender in the EV market.
Ford Motor stock rose 0.8% in premarket trading on Monday, reaching $11.16, ahead of its quarterly earnings release. Despite the recent price reduction, Ford’s stock performance remains challenged, with a nearly 9% decline year-to-date. As the EV market continues to evolve, Ford’s aggressive moves and focus on cost-competitiveness will be key to its success in the coming years.
