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It looks like electric vehicle Black Friday has officially kicked off. Ford announced yesterday that it’ll cut prices on its electric Mustang Mach-E models by as much as 8%, putting the price range at about $46,000 to $64,000—which means it’ll be selling some of them at a loss.
The move follows the unprecedented and sweeping discounts that rival EV manufacturer Tesla rolled out earlier this month. Both companies hope that making the cars cheaper will convince more customers to buy them.
Demand for pricey EVs is under threat as high interest rates make financing auto purchases more expensive and recession fears leave people less willing to crack open their piggy banks to snag dream cars. Ford and Tesla may also be considering the government tax credits, worth up to $7,500, for EVs priced under a certain threshold (some Tesla and Mach-E models will now be eligible). And there’s more competition from automakers like Nissan and Chevrolet producing increasingly cheap EVs.
But it’s not just EVs becoming more affordable:
Not everyone is celebrating
Many people who purchased a Tesla shortly before the price cuts are not thrilled about having to make hefty loan payments on what is now a less valuable depreciating asset. Some disgruntled Tesla buyers signed a petition demanding free or discounted software downloads for their vehicles, while others have inquired about refunds, according to the Wall Street Journal.
Big picture: Major automakers, which enjoyed soaring profits last year, are now bracing for a reversal of fortunes and looking at ways to cut costs. But difficulties notwithstanding, many companies are still ramping up EV production and legacy car manufacturers are pushing forward with electrification goals.—SK