The legacy automaker is determined not to let Tesla grow its already huge market share in EVs.
The legacy carmaker, which is on a major offensive in the electric vehicle market, is determined to compete head-on with the sector leader in terms of profitability, market value, production and sales.
The brand with the blue oval intends to battle Tesla in all markets, even those where the group of charismatic and whimsical Elon Musk has a big advantage, such as China.
China is the largest automobile market in the world and also the most important when it comes to electric vehicles. The tax credits and aid given to consumers and manufacturers to facilitate the adoption of low-emission vehicles also makes it an ideal battleground for any vehicle manufacturer wishing to establish itself in this very lucrative segment of the automotive industry.
Ford Cuts Prices
Ford and Tesla compete there in particular on the niche of electric SUVs. Ford’s weapon is the Ford Mustang Mach-E, while Tesla has its best-selling Model Y.
The group led by Jim Farley has just made a surprising decision. This amounts to lowering the prices of the different versions of the Mustang Mach-E in the country.
The manufacturer offers four versions of this EV.
The initial price of this model is RMB 275,900 ($37,911) for the RWD Standard Range, while it rises to RMB 389,900 ($53,576) for the GT First Edition model.
Ford has announced on social network WeChat that the price of the four versions of the Mustang Mach-E produced in China since October 2021 has now dropped. The reduction varies between 5% and 9%, which allows the two cheapest versions the benefit of the subsidy of RMB 11,088 ($1,523.62) granted to battery electric vehicles (Bev) in the country.
The Standard Range RWD now costs RMB 249,900 ($34,339), down 9.4%.
The RWD Long Range sees its initial price decrease by 9% to RMB 288,900 ($39,698).
The cost of the RWD Premium decreases by 5.4% to RMB 349,900 ($48,080).
And finally the GT sees its price decrease by 5.1% to RMB 369,900 ($50,828).
Ford’s price cut comes just months after a price hike between RMB 7,000 and RMB 22,500 last May of the Mustang Mach-E in China.
The Dearborn, Mich.-based company does not explain what led to the new pivot. In the announcement on WeChat, the automotive group said it has the two cheapest versions in stock.
This information suggests that there is an imbalance between supply and demand.
Ford did not respond to a request for comment.
Importantly, Ford’s move comes just days after a similar move by Tesla that lowered prices in China to between 5% and 9%. Tesla markets three versions of the Model Y in China. The base model, the Model Y RWD has been selling for the base price of RMB 288,900 ($39,698) since Oct. 24.
Last week, EV maker Aito which is backed by Huawei, also cut prices for its vehicles. Ford is therefore aligning itself with its competitors to remain as competitive.
Ford and Tesla’s moves bring their vehicle price ranges back to levels closer to those of early March, with the two groups and other automakers raising prices several times over the past year to adjust to the increase in costs, in particular lithium, which has almost tripled.
But Musk and auto industry experts recently said that prices for raw materials have started to fall. Steel and aluminum prices notably fell.
The decision in China is the opposite of the situation in the United States where carmakers have still not made a gesture towards consumers after several price hikes aimed to pass on to consumers an unexpected increase in their costs.
At the beginning of October, Ford decided to increase the prices of the F-150 Lightning, the electric version of the iconic pickup/truck F-150.