In order for you to charge more, Ford and Tesla want to charge you less.
Just a few weeks after Tesla lowered pricing on a number of its models to remain competitive in the expanding EV market, the Detroit auto giant revealed on Monday that it is reducing the price of its electric Mustang Mach-E crossover by up to roughly 9%, depending on the type. Who claims that inflation is enduring?
Electric Boogaloo from Price Wars II
Elon Musk initiated the action. Tesla just reduced the cost of both its entry-level Model Y by nearly 20% to $53k and its high-performance Model 3 sedan by approximately 14% to roughly $54k. The price reductions brought Tesla’s goods closer to Ford’s mid-tier Mustang Mach-E models’ price range, putting both vehicles under the $55,000 threshold that entitles buyers to a $7,500 federal tax credit.
Analysts immediately predicted that Tesla’s abrupt shift in direction (and no, we’re not talking about this one, or this one, or any of these ones) would have an impact on the entire sector. The first to give in was Ford, which just raised EV costs over the summer, albeit the established automaker still has a long way to go to catch the industry’s leader:
Ford’s Mach-E automobile has theoretically six separate price tiers, with average price reductions of 6% across all models, or a “centre cut” discount of about $4,500. Now, the entry-level model will cost $46,000, while the variant with all the bells and whistles will cost $64,000.
According to Motor Intelligence, Ford was the second-largest seller of electric vehicles in America last year. However, it only persisted for around 8% of the US market, with Tesla controlling a commanding 65% (down from 72% the previous year); EV sales would still only make up about 6% of all US auto sales in 2022.
Van Life: Life in the EV country isn’t always rosy. On Monday, Arrival, a UK-based EV van business that had a $15 billion valuation just two years prior, also announced the layoff of half of its remaining workforce, or about 800 workers, and named a new CEO. However, the firm also issued a “going concern” warning in December that its cash reserves were unlikely to continue the following 12 months. The company now claims that it does not expect production to start until the second half of next year. Arrival isn’t one of the many things that keep Elon Musk up at night, though.