May 28, 2024

Taylor Daily Press

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A price war for electric cars is underway in the US

A price war for electric cars is underway in the US

Photo: ANP

In the US, a price war is brewing among electric car manufacturers. Recently, US Tesla cut its prices in the domestic market by up to 20 percent to stimulate demand. Rival Ford is now following suit, with an average price cut of $4,500 for its electric Mustang Mach-E.

It is not yet known if Ford will also cut its prices in Europe. Tesla did it all over the world, including the Netherlands. The company’s chief executive, Elon Musk, acknowledged last year that prices had become “uncomfortably high” and could hurt demand. According to him, demand has increased sharply in recent weeks due to the reduction in prices. However, those who bought a Tesla before the reduction were not happy about it. They see the value of their car depreciating rapidly on the second-hand market.

Ford had already indicated before the price cuts that the electric Mustang was unprofitable. However, the group hopes to offset the poor profit margin by increasing production by more than two-thirds this year.

Prices of different versions of the Mach-E have been slashed by up to 8 percent. Optional batteries with higher range also become cheaper, by about 19 percent.

“Ford slashed prices of its Mustang in response to Tesla’s price cuts. A mini-price war is about to start,” says a market expert at security firm Wedbush Securities.

The cheapest Mach-E is now $45,995 (42,588 euros) in the US. In the Netherlands, the starting price of this car is 58,100 euros. Its direct competitor, the Tesla Y, is now priced from 46,990 euros in our country.

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“Our competitors are also changing their prices. If we want to be competitive, we have to respond,” said Marin Gajaja, director of Ford’s electric business in the US. The price cut in the US means the electric Ford, like many Tesla models, is eligible for a US$7,500 electric vehicle tax credit in the country.