Ford cuts Mustang Mach-E price as Tesla raises Model Y price

Automaker Ford (F) has announced price cuts for its 2023 Mustang Mach-E by up to $8,100 in an attempt to remain competitive amid the electric vehicle slowdown.

Yahoo Finance Senior Autos Reporter Pras Subramanian takes a closer look at this price change and how Ford's all-electric Mustang matches up to Tesla’s (TSLA) Model Y.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim

Video transcript

[AUDIO LOGO]

- Ford announcing today it's cutting the price on its 2023 Mustang Mach-E SUV. The company hoping to stay competitive against Tesla, as the EV market slows down. Yahoo Finance's Pras Subramanian here with more.

Yes.

PRAS SUBRAMANIAN: Interesting that they're cutting this price, and the timing of it. What's going on?

PRAS SUBRAMANIAN: Well, I just did a story this weekend on how it's a good time to buy EVs, and now I guess I got to add this to the mix of good, of very well attractive price to EV. So Ford dropping the base price of their Mustang Mach-E to 38, 39,895, which as you can see there, that's the rear wheel drive version. It's comparable to actually undercutting the Tesla Model Y rear wheel drive there.

Among other price cuts, also cutting the premium all wheel drive version of the Mustang Mach-E by $8,100 to $48,895. Which again, is around the same price as the Tesla Model Y, the equivalent version. So really they're trying to target that Model Y as their key rival in that space, that crossover EV space. And also 0% financing, which is pretty nice to have.

But we're also talking about a sector or a segment where it's really hard to compete, and Ford CEO Jim Farley talked about how it's so hard in this two row crossover EV world. It's just too hard to compete. They might actually exit this segment, at some point. And also they lost the tax credit for this car.

- Yeah, that's right. That's true, right. When did they lose that tax credit eligibility?

PRAS SUBRAMANIAN: So when the new rules came in place in January 1 about where you got certain components for your batteries and things like that, you would lose the tax credit. So they don't have it. Only the lightning has it now for Ford EVs. So this is a way to make this competitive. But they also, Ford is saying they lost, they're going to lose $5 billion on EVs this year.

- Now, we mentioned at the beginning, this is the 2023 Mach-E that they're cutting the price.

PRAS SUBRAMANIAN: Yes, that's right.

- Are they coming out with new model years for this?

PRAS SUBRAMANIAN: Yeah. So Ford has said they this is an incentive to get that inventory out of the way to make room for the 2024. But this is a pretty substantial price cut across the board for these different trims. So it's a little bit of get some old stuff out of the door, but also maybe trying to move some product.

- Interesting.

- All right, Pras. Thank you, my friend. Appreciate it.