Benzinga - Electric vehicle leader Tesla Inc (NASDAQ: TSLA) dominated the sub-sector of the automotive industry for years. Legacy automakers are increasing their focus on electric vehicles, which could put pressure on Tesla’s dominant market share.
What Happened: Tesla made massive headlines when it announced price cuts on its electric vehicle models in the U.S.
The price cuts ranged from 6.4% to 19.7% and brought the price of a Model 3 down to $43,990, or $36,490 after tax credits.
The result of the price cuts was a huge jump in requests with Tesla CEO Elon Musk saying that the numbers in January were nearly double the production from the company.
Tesla is guiding for vehicle sales of 1.8 million units in 2023, with Musk saying the popularity of the price cuts could help boost the figure closer to two million.
“We think demand will be good despite probably a contraction in the automotive market as a whole. So, basically, price really matters,” Musk said.
On Monday, Ford Motor Company (NYSE: F) announced price cuts to its Mustang Mach-E electric vehicle and also announced an update to production.
Ford cut the price of the Mustang Mach-E by around $600 to $5,900 across its variety of ranges and models. The cheapest Mach-E is now $45,995 before tax credits.
The automotive giant also said it was increasing production of the Mustang Mach-E in 2023 to “reduce customer wait times and take advantage of streamlined costs to reduce prices across the board.”
Ford said the moves were done to make the company more competitive in the marketplace but didn’t name the Tesla price cuts as a reason.
“We are not going to cede ground to anyone. We are producing more EVs to reduce customer wait times, offering competitive pricing and working to create an ownership experience that is second to none,” Ford Model E Chief Customer Officer Marin Gajaja said.
Along with the price cuts, Ford offered special financing rates from its Ford Credit unit on all Mustang Mach-E vehicles ordered between Jan. 30 and April 3, 2023.
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Why It’s Important: Ford saw strong demand for its electric vehicles and was one of the few companies to offer electric vehicles across the car, truck, SUV and van segments.
The Mustang Mach-E was the third bestselling electric vehicle model in the U.S. in 2022 according to Ford. The company ranked as the second-largest electric vehicle manufacturer in the U.S. market in 2022.
“Our customers are at the center of everything we do — as we continue to build thrilling and exciting electric vehicles, we will continue to push the boundaries to make EVs more accessible for everybody,” Gjaja said.
Electric vehicles continue to be a big focus for the future of Ford.
The company’s vice president of sustainability Bob Holycross said electric vehicles could help revive Ford and create a “refounding of the company.”
Ford’s Chief Executive Officer Jim Farley has put a strong emphasis on electric vehicles since taking over the top role.
“Turn around automotive operations; allocate capital to Ford’s strongest franchise and high-growth opportunities; produce compelling, uniquely Ford electric vehicles at scale; and stand up new AV-enabled businesses,” Farley said in October 2020 when he became CEO.
F Price Action: Ford shares are down 1.66% to $13.07 on Monday morning. Ford shares have traded between $10.61 and $21.05 over the last 52 weeks and are down 36% in the last year.
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Photo: Courtesy Ford
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