Ford falls after it slashes the price of the Mustang Mach-E in response to Tesla's recent price cuts
Shares of Ford fell on Monday after it became the first automaker to respond to Tesla's recent price cuts.
The company slashed the price of its electric Mustang Mach-E by as much as 9% for certain trims.
"We are responding to changes in the marketplace... We want to stay competitive," Ford said.
Ford stock fell on Monday after it became the first automaker to respond to Tesla's recent electric vehicle price cuts.
Ford is dropping the price of its electric Mustang Mach-E by as much as 9%, depending on the trim. The average price cut across all of its trims is about 6%. The GT Extended Range Mustang Mach-E will now cost about $64,000, a drop of nearly $6,000.
Shares of Ford fell as much as 2% in Monday trades, while shares of Tesla fell as much as 3%.
Ford also said it would be expanding the production capacity of its Mustang Mach-E this year. The company now expects to produce 130,000 this year, up from a prior target of 78,000.
"We are responding to changes in the market place... We want to stay competitive in the market place," Ford's chief customer officer Marin Gjaja said in a media briefing.
Tesla reduced the price of its vehicles across the board earlier this month, with some models falling by as much as 20%. A price war is now brewing between the electric vehicle makers as competition heats up and Tesla looks to protect, if not expand, its market share.
But Gjaja said Ford's Mach-E price cuts were not a direct response to Tesla's, which ranged from 6% to 20%.
"We have a different product. We have different customers. We try to have an offering that we think is better than Tesla's and then we try to price accordingly to what we think is appropriate in the market," Gjaja said.
Currently, Tesla's Model 3 and Model Y are the top selling electric vehicles in the United States, with the Mustang Mach-E in third place.
The EV price cuts also come at a time when economic worries are growing, with many economists expecting a recession to hit the US later this year. If a recession does materialize, new vehicle purchases would be one of the first items consumers would scale back on.
Read the original article on Business Insider