Tesla raises price of Model Y, Ford won't do same for Mustang Mach-E

Phoebe Wall Howard, Detroit Free Press
·3 min read
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After making headlines for price cuts on its electric vehicles in January, Tesla reversed course and raised the price of its Model Y late Friday after the U.S. government relaxed regulations for electric vehicle tax credits.

But Ford is not planning to raise the Mustang Mach-E price or change plans to offer a price break to recent buyers, Ford spokesman Marty Gunsberg confirmed to the Detroit Free Press on Saturday.

Executives for the Dearborn automaker have said in recent days the company is committed to gaining market share and going head-to-head with the top-selling electric automaker.

And that means a price war.

Industry analysts see the Tesla Model Y and Ford Mustang Mach-E as competing for the same buyer.

The cost of the Model Y Long Range has increased by $1,500 to $54,990, while the Model Y Performance is up $1,000 to $57,990, according to the company website. Tesla notes on its site that a $7,500 federal tax credit is in effect for deliveries until March 2023.

Tesla decreased and then increased the price of its Model Y. The cost of the Model Y Long Range has increased by $1,500 to $54,990, while the Model Y Performance is up $1,000 to $57,990. The SUV competes with the Ford Mustang Mach-E.
Tesla decreased and then increased the price of its Model Y. The cost of the Model Y Long Range has increased by $1,500 to $54,990, while the Model Y Performance is up $1,000 to $57,990. The SUV competes with the Ford Mustang Mach-E.

Chief Executive Officer Elon Musk said last month on the company’s quarterly earnings call that price cuts had led to a surge of demand, and that Tesla had “actually raised the Model Y price a little bit in response to that," Bloomberg reported.

Ford dropped the price of the 2023 Mustang Mach-E SUV by $600 to $5,900, depending on the model, which now can range from $46,000 to $64,000. Its average transaction price from October through December 2022 was $59,431, according to Cox Automotive.

The 2023 Mustang Mach-E Premium Edition recently saw its price cut $3,980 to $50,995.
The 2023 Mustang Mach-E Premium Edition recently saw its price cut $3,980 to $50,995.

The Model Y price adjustment comes after the Biden administration qualified more vehicles for the tax credit. The U.S. Treasury Department announced Friday that it had broadened the definition of a sport utility vehicle to allow more consumers to take advantage of the federal tax credit.

Under the Inflation Reduction Act, sport utility vehicles costing up to $80,000 can now qualify for tax credits.

More vehicles built by Tesla, Ford and General Motors will qualify.

More:Ford CEO Jim Farley says only 1 company is challenging Tesla right now

Ford CEO Jim Farley tweeted Friday evening: "Appreciate @USTreasury’s consideration and hard work to help more customers access clean vehicle tax credits under the Inflation Reduction Act. With this change, more @Ford PHEV and EV models are eligible like the @LincolnMotorCo Corsair, Ford Escape and Mustang Mach-E."

The company, founded in 1903 and run by Farley, is challenging Tesla, a company founded in 2003 and run by Musk. Ford is not yet making a profit on electric vehicles that include the Mustang Mach-E, Ford F-150 Lightning and E-Transit van.

It is the F-Series pickup truck franchise that generates billions of dollars for Ford. And that operation is thriving, with enough advance new Super Duty truck orders pending to last months.

Meanwhile, General Motors slashed prices on its 2022 Chevy Bolt EUV (electric utility vehicle) and then raised prices for the 2023 model this year. GM CEO Mary Barra has said pricing in the $30,000 range is key to mass adoption, and the Bolt is priced for affordability, starting below $30,000. She said during her earnings report call with industry analysts last month that EV price adjustments aren't needed on GM products.

The 2023 Chevy Bolt EUV (electric utility vehicle) starts at fewer than $30,000 and is not part of a price war between the popular Tesla Model Y and Ford Mustang Mach-E.
The 2023 Chevy Bolt EUV (electric utility vehicle) starts at fewer than $30,000 and is not part of a price war between the popular Tesla Model Y and Ford Mustang Mach-E.

More:Ford to use Model e name it blocked from Tesla in trademark fight

More:Ford CEO Farley eyes Norway for secret to Tesla's future strategy

Contact Phoebe Wall Howard: 313-618-1034 or phoward@freepress.com. Follow her on Twitter @phoebesaid.

This article originally appeared on Detroit Free Press: Tesla raises price of Model Y, Ford Mustang Mach-E stays same