By David Shepardson and Aishwarya Nair
(Reuters) -Ford Motor Co on Monday cut prices of its electric crossover SUV Mustang Mach-E by as much as $5,900 per vehicle, weeks after rival Tesla Inc slashed prices globally on its electric vehicles by as much as 20%.
Shares of Ford closed down 2.9% in above average trading to $12.89. Tesla fell 6.3%.
The move comes as electric vehicle manufacturers are feeling pressure from Tesla’s price cut to respond.
“Ford just cut Mustang EV prices in response to Tesla’s price cut. Mini price war about to begin with EVs in the US with Tesla’s shot across the bow on price cuts,” said Dan Ives, an analyst at Wedbush Securities, on Twitter.
The move will make at least one additional version of the Mach-E again eligible for a $7,500 federal tax credit, which requires the Ford EV to have a suggested retail price of no more than $55,000 to be eligible.
Ford had already planned to increase Mach-E production this year at its plant in Mexico to 130,000 vehicles from 78,000 in 2022, and said in November it was accelerating Mustang Mach-E production and targeting global annual production rate of 270,000 by the end of 2023 including its China production.
Ford builds the Mach-E in Mexico and China.
“Tesla’s price cut was a major blow to the prospects of competing EV models and the Mustang Mach-E directly competes with Tesla’s Model Y,” said Garrett Nelson, an analyst at CFRA Research.
Ford is cutting prices by up to 8% on various versions of the Mach-E, as well as cutting the price of the extended range battery by about 19%. The lowest-price models are getting smaller $600 to $900 price cuts. The Ford price cuts only impact North American prices.
Ford Chief Executive Jim Farley said on Twitter, “scaling will shorten customer wait times. And with higher production, we’re reducing costs, which allows us to share these savings with customers.”
Ford sold 39,458 Mach-Es in the United States last year, up from 27,140 in 2021.
General Motors said Monday it had no plans to adjust prices in response to others. The Detroit automaker in June cut prices on the Bolt by around $6,000 and by as much as 18% for the lowest-price version and earlier this month the vehicle became eligible for the $7,500 federal tax credit.
Ford said existing Mustang Mach-E customers awaiting delivery of vehicles will automatically receive the price cut.
(Reporting by David Shepardson in Washington, Joseph White in Detroit and Aishwarya Nair and Nathan Gomes in Bengaluru; Editing by Krishna Chandra Eluri, Nick Zieminski and Christian Schmollinger)