2023 Ford Mustang Mach-E

Ford Motor Company

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Tesla may dominate the electric-vehicle market, but that's not stopping Ford from trying to compete with the EV giant. Just weeks after Tesla cut prices on its Model Y SUV and Model 3 sedan, Ford is upping the ante by increasing production and decreasing the price of its popular electric SUV: the Mustang Mach-E. As one of Ford's most high-profile EV products, the Mach-E has helped the manufacturer to become the second bestselling EV automaker in 2022, behind industry leader Tesla.

The rise in production and fall in price for the Mach-E is a much different tune from what the Dearborn, Michigan-based automaker was singing just last year. Ford raised the price of the midsize SUV in August by as much as $8,000 and by December, the auto giant said the vehicles were sold out, putting the launch of the 2023 models on hold while it focused on balancing supply and demand. But when Tesla announced price drops of as much as 20%, Ford was quick to reevaluate its plans for the Mach-E. "We are responding to changes in the marketplace," said Marin Gjaja, chief customer officer of Ford’s electric vehicle division, during a media briefing. Gjaja also said that Ford wants to "stay competitive in the marketplace." 

Price reductions for the Mach-E range from $600 to $5,900 depending on model options. The least-expensive Mach-E, the rear-wheel-drive standard range model, is now $900 less. Starting prices for the Mach-E are now $46,000-$64,000 compared to Tesla's Model Y, which ranges from $53,500 to $57,000 with no options. 

Gallery: Electric Cars Cheaper Than a Tesla

Consumers who have bought a Mach-E since Jan. 30 have paid the new, lower price, Ford says. But what about drivers who purchased a Mach-E weeks ago? The automaker says that any customers who have already ordered a Mach-E and are awaiting delivery will automatically receive the reduced price, and it plans to reach out with a "private offer" to customers who bought their vehicles after Jan. 1 and already took delivery. 

When it comes to tax credits, some versions of the Mach-E and Model Y are eligible, according to the IRS. Both are considered cars under IRS rules, not SUVs, unless equipped with third-row seats, a feature unavailable on the Mach-E. A $4,000 third-row option is available with the Model Y, which would allow drivers to score the tax credit as long as the sticker price was under $80,000. For drivers of the Mach-E or two-row Model Y, any model that costs less than $55,000 remains eligible for the tax credit.

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