Tesla CEO Elon Musk just got a huge win over a key rival after Ford announced it is slashing prices for its Mustang Mach-E electric SUV amid a brutal EV price war. Ford caved after Musk slashed prices on certain Tesla cars but Musk has an ace card up his sleeve that Ford does not.
Marin Gjaja, chief customer officer for the Ford Model e division said: “We are responding to changes in the marketplace. We want to stay competitive in the marketplace.” Gjaja denied the price cuts were an attempt to keep up with Musk who recently cut prices on his Tesla cars.
“We have a different product, we have different customers,” he said. “We try to have an offering that we think is better than Tesla’s and then we try to price accordingly to what we think is appropriate in the market.”
But Musk runs a tight, profitable ship and he has a bigger profit margin on his cars than Ford.
@elonmusk is a genius….Ford cuts price of EV Mustang Mach-E, following Tesla's cuts https://t.co/uZERY91BoC
— Personanongrata2024 (@PersonaNG2024) January 30, 2023
Musk also sells software to power innovations like self-driving separately giving him even more of a cushion. Ford? They are selling their cars at a loss to keep up.
Ford said of the price cuts:
“With its new EV supply chain coming online, Ford is significantly increasing production of the Mustang Mach-E this year to help reduce customer wait times and to take advantage of streamlined costs to reduce prices across the board, making Mustang Mach-E even more accessible to customers and keeping it competitive in the marketplace.”
According to CNBC:
“Ford declined to comment on which Mach-E trims and models would be profitable after the price cuts. The company is expected to begin separately reporting financial results for its electric vehicle business, known as Model e, later this year.
“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.”
“To increase Mach-E production, Ford is upgrading the plant in Mexico where the vehicles are made. It is expected to come back online next month, Ford said.”
According to an expert on the car market:
“In Ford’s case, the price cuts will mean not all Mach-E models, based on the trim, will be profitable on a per-unit basis.”
“In Ford's case, the price cuts will mean not all Mach-E models, based on the trim, will be profitable on a per-unit basis”
I applaud Ford.
The right long-term move.
The cost to build a Ford is irrelevant to consumers. Market always sets the price.
— CarDealershipGuy (@GuyDealership) January 30, 2023
How Tesla's price cuts could spur an EV pricing war @CNBC @ford @GM @Tesla @elonmusk Only way GM & ford make a dent is with ridiculously $$ cars that aren’t reliable. Tesla will whip them at lower prices. Sharpen pencils kids! https://t.co/WDpWeS47B4
— Sarc Genneus (@SGenneus) January 25, 2023