Jorden McVeagh, Editor
The electric vehicle industry has been on the rise as consumers look to shift to a more sustainable and environmentally friendly mode of transportation. Tesla was the industry leader in terms of their design, pricing and distribution as we all saw its cars popping up all over the place in the last year or two. Companies have been following their lead and creating their lines of electric vehicles. Whether this is due to the creation of vehicle lines or an extension of already existing models, they are becoming a far more popular option than they were in the past. The problem with the industry is that it is still new, so product design, safety and pricing are still metrics that are being played around with from the manufacturer. Ford is one of the companies doing this today. They released a product called the Mach-E which was created to be one of the top competitors for Tesla’s Model Y. Last week, Ford announced that it would be cutting the price of their car after Tesla announced a price reduction for the Model Y in early January. For Ford, the price reduction fluctuates between $600 up to $5,900. This is not as much as Tesla’s $13,000 price cut, but at the same time, the price of Ford’s model is not as expensive as Tesla’s. Most of the time, when we hear about the price reduction of a product, it is usually associated with a negative impact. This may not hold true in this case. Wall Street investors are applauding these cuts as they can be used to drive up demand and sales of the product. As we inch closer and closer to a recession, consumers are tightening their wallets and a high-priced electric car may not be what people want to be spending money on right now. Tesla is acting as a regulator in the current market. If the industry leader cuts their prices, other companies will follow. Not many people would pay for another brand when Tesla is the lowest in terms of cost. When you pair this with the brand image Tesla has generated up to this point, other companies need to cut prices to stay competitive. The expected increase in sales will reflect Ford’s vehicle output. The quantity produced of the Ford Mach-E is expected to jump from 78,000 to 130,000 units annually produced. The Mach-E is the second-best selling EV in the US behind Tesla. Ford’s model comes in between the prices of $46,000 and goes all the way up to $64,000 while Tesla averages between $53,500 to $57,000. Tesla however outsold Ford with more than 522,000 units sold just in the US alone in 2022. To increase production, Ford has moved outside the US for the mass construction of their vehicles. They have a plant in Mexico that is currently under construction for upgrades but will be operational in the coming months. It will be interesting to see how these price cuts benefit those in the industry. Will they see an increase in revenue? Drop in sales still? Time will tell, but as more consumers shift to EV, this will surely increase their appetite to buy in the current trending economic conditions.