Benzinga - by Anan Ashraf, Benzinga Editor.
Since Ford Motor Co (NYSE:F) slashed Mustang Mach-E electric SUV prices in February, the model’s movement has seen a dramatic rise, implying that cost is the key hindrance to EV adoption, according to analytics firm Cloud Theory.
What Happened: Cloud Theory that the number of vehicles moved in the weeks following the price cut “jumped meteorically.”
Before the price cut, only about 300 units of the vehicle were moving every week, but following the price cut, it jumped to above 1,000 and then to more than 1,800 later.
In the 30 days since the company cut prices on Feb. 20, Mach-E’s share of vehicles moved within the EV space nearly tripled, going from 5.2% to 13.3%, Cloud Theory noted.
“Ford's actions — and consumers' reactions to them — show that EVs still have strong potential in the marketplace,” the firm said.
The price cuts in February ranged between $3,100 and $8,100 for different versions and brought the starting price of the SUV down to $39,895, below its rival Tesla Model Y SUV.
Why It Matters: While price cuts do indeed help drive popularity, companies like Ford have been struggling to scale EV sales profitably.
Ford expects losses for its electric vehicle business segment, Model-e, to widen to a range of $5 billion to $5.5 billion this year, owing to pricing pressure and investment into its next generation of vehicles. The Model-e segment posted a full-year EBIT loss of $4.7 billion for 2023.
Noting that the increase in demand following the price cut is only temporary relief, the firm said, “The industry’s move towards EVs will continue to face demand hesitations, profitability challenges, and regulatory adjustments. It’s a given that the next decade will be fraught with uncertainties and obstacles to overcome.”
In February, Mach-E sales in the U.S. jumped 64.3% year-on-year to 2,930 units, unlike January when it slumped 50.7%.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
Read More: Tesla Model Y Gets $1,000 Price Hike Across The Board In The US
Photo via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.