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Ford Mustang Mach-E Sales ‘Catching Fire’ After Huge Price Drop

Ford slashed Mustang Mach-E prices after the electric crossover lost eligibility for the federal tax credit at the start of the year. Some Mach-E trims, including the extended range Premium RWD and AWD, received heavy discounts of $8,100. Ford is now reaping the rewards from the price cuts as Mach-E inventory levels have started to drop.

The Dearborn automaker released its Q1 2024 sales results today, and numbers show that Ford EVs are gaining some sales momentum. The Mach-E, F-150 Lightning and the E-Transit electric van had a robust start to the year. Mach-E sales increased to 9,589 units over the first three months, up by 77% from the same period last year.

High MSRP is a barrier to wider EV adoption.

Several studies involving thousands of respondents have concluded that buyers are cautious with EVs, with a high sticker price being one of the biggest roadblocks. The price war, first started by Tesla last year, has proved that when EV prices are comparable to gas cars, buyers are more willing to make the switch.

“We saw an immediate bump,” Rick Wainschel, vice president of data and analytics at Cloud Theory, told Automotive News on how the market reacted to the price cuts. “The [Mustang Mach-E] started to really catch fire over the last couple of weeks in particular,” he added.

Since Ford announced the discounts, which InsideEVs outlined comprehensively in a previous report, inventory levels have dropped 9%, with inventory movement tripling within a few weeks. It’s a strong sign that demand for EVs isn’t waning as some reports would have you believe—buyers just want them to be priced right.

However, there’s still some work left to do. Cloud Theory states that Mach E’s turn rate, the percentage of vehicles clearing from the inventory over a certain period, was still below the industry average. Even though its turn rate soared from 7% to 33% since the price cuts, it remains under the industry average of 45%.

Note that the price cuts were for model year 2023 Mach-Es, and Ford wants to make space for MY2024 models.

However, it’s a good sign for the brand, which now claims to be the second best-selling EV maker in the U.S. behind Tesla. That comparison is a little foolish because the gulf between the first and second positions is massive. Tesla sold over 386,000 EVs in Q1 globally (that itself is a separate issue), whereas Ford crossed 20,000 units in the U.S.

Ford Mustang Mach-E Rally

The impact of this brutal price war is unclear at the moment. But we know for sure that it’s hurting Ford’s bottom line. Some estimates suggest that the carmaker’s Model e electric vehicle division lost $36,000 on every EV it sold in the third quarter of 2023. Ford lost some $4.6 billion last year selling EVs.

The road to profitability is long, but the recent spike in demand should help the brand strategize and rationalize costs for its upcoming “skunkworks” projects.

Several affordable Ford electric cars, built on a BEV native platform, are in the pipeline to fend off the potential threat from Chinese EVs and to compete with Tesla. A dedicated Ford team, separate from the “mothership,” is developing a $25,000 compact SUV, a small pick-up truck and an EV for rideshare purposes.

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