Not too long ago, electric vehicles were kind of like zero-edge pools: Nice to look at, but definitely not made for anyone who doesn’t already own more houses than cars. After a recent EV price drop from Tesla, though, Ford is following suit, potentially indicating an industry shift.
The New York Times reports that Tesla cut their prices by up to 20 percent mid-January, affecting all of their models at least partially. Ford responded by dropping the price of their new Mustang Mach-E by varying amounts, with the cheapest options decreasing the least while “premium” versions benefited from a decrease of up to nine percent.
“We want to make E.V.s more accessible, so we’re increasing production and reducing prices across the Mach-E lineup,” said Jim Farley, CEO of Ford, in a Twitter statement, citing a reduction in production costs that allows the company to “share these savings with customers.”
Currently, the most affordable Mustang Mach-E, which is the base model with standard features, costs just under $46,000; the more luxurious Mach-E GT is just under $64,000.
By comparison, Tesla’s most affordable model is the Model S, which clocks in at just under $44,000, while its Model Y–most comparable to the AWD version of the Mustang Mach-E–is just under $54,000.
These changes aren’t random, of course. A federal tax credit of $7,500 for electric vehicles that cost less than $55,000 was made available under the Inflation Reduction Act this year, so both Tesla and Ford are hoping to sell more of their inventory with this incentive in place, made all the more possible by the varying increments of price cuts.
For their part, Ford is also lowering the interest rate for Mach-E purchases between now and April 3rd, looking to offer subsidized loans that go as low as 5.34 percent.
The price cuts are welcome, but they may not be enough to offset high federal interest rates and the lasting repercussions of inflation.
Many Americans are holding off on making large purchases for the time being–as evidenced by these companies’ self-inflicted price changes–and the trepidation that inspired these changes most likely will not dissipate any time soon.
