Ford to boost Mustang Mach-E production, lower prices
Yahoo Finance’s Pras Subramanian joins the Live show to discuss news that Ford will boost production of its Mustang Mach-E model.
Video Transcript
- Ford's new EV supply chain is coming online, and the company is ramping up production of its Mustang Mach-E to help reduce customer wait times and take advantage of streamlined costs to reduce prices across the board. Now, the move prices Ford's Mach-E more competitively against Tesla, which recently cut prices as well. For more on the EV market, let's go to Yahoo Finance's Pras Subramanian. Good for consumers. I know they like to hear these price cuts coming in.
PRAS SUBRAMANIAN: Everyone loves price cuts, but Rochelle, really, the big news here is this is all in response to Tesla cutting prices of that Mustang Mach-E here. You know, from as little as $600 to $6,000 for certain models, now you have four miles below that very, very, very important, 55,000 IRA price tax cap that you need to get that big tax rate credit, so that's a huge deal for Ford there.
Ford said in a statement, though, "We are not going to cede ground to anyone," a very strong statement there because they're basically talking about Tesla there, right? So strong words, but will it be enough to sort of compete? And like you mentioned, Ford also boosted production. They didn't say by how much, but I want to note that they sold around 40,000 Mach-E's last year. So I imagine they're looking to at least double that capacity by 2023.
- And you know, people are always looking for things like new models. We haven't seen any new models from Tesla in a while, but when you look at the prices, some of it might be apples to oranges depending on how different they are, but how do the prices for the new Mach-E compared to Tesla's vehicles?
PRAS SUBRAMANIAN: So after the price cuts, the most compelling sort of trim here for the Ford Mustang Mach-E is the-- it's called the E all-wheel drive premium model. That costs from about $54,000. That compares very favorably to the standard Model Y Long Range, which is around the same price. Both are all-wheel drive. Both will qualify for that $55,000 price tax credit. So that's probably where the battleground is for Ford versus Tesla.
But Tesla has a secret weapon the sense that their seven-seat trim versions qualify for an $80,000 price cap from the IRA. So if you add that $4,000, seven-seater trim selection for your Model Y, you get that higher price cap for the tax cuts. And that means you can buy more expensive versions of Tesla's cars, which are then better for Tesla from a margin point of view.
- So definitely keeping that in mind, sort of doing the math here to work out what ends up better for you and your tax breaks. Also, I want to talk Toyota, still selling more cars than anyone else. What's the story there?
PRAS SUBRAMANIAN: Yeah, you know, globally, they eked out a win over Volkswagen now. I think it's the third year in a row they've been the number-one car seller in the world. You know, sort of like-- it's a good thing to kind of have as a feather in your hat, but when we're talking about margin shrinking, component crises, it's actually hard to sort of execute and take that crown away.
Ford-- sorry, Volkswagen is sort of coming on their heels, and then Toyota had to actually-- they've changed up their CEO. They switched over CEOs now because they're kind of behind the game in terms of EVs. They haven't been selling that many EVs at all, but they sell a lot of hybrids, which are very competitive, very in demand for consumers still.
So in a good spot for Toyota here, but I think that down the line, I don't think they really want to be that number-one builder because it's too much pressure there to actually perform when you're trying to actually boost prices and boost margins in this kind of changing world in autos.
- It's changing fast after they took the crown from GME. Interesting to see what happens when they do really make that push into the EV space. Pras Subramanian, thanks so much.