Ford lowers price tag for Mach-E as Tesla lifts prices on Model Y and Model 3

Ford is cutting U.S. starting prices on its Mustang Mach-E electric SUV, bringing many versions below the cost of its main competitor, the Tesla Model Y.

Also on Tuesday, Tesla raised prices by $250 on the Model Y SUV and the Model 3 small sedan, its two top-selling vehicles.

The standard range base versions of the Mach-E each saw $3,000 price cuts, with the rear-wheel-drive version falling to $42,995 and the all-wheel-drive model going to $45,995. Ford cut $4,000 off prices of the premium standard-range versions, with rear-wheel-drive dropping to $46,995 and all-wheel-drive going to $49,995. 

The price of the GT all-wheel-drive extended range version also fell by $4,000 to $59,995.

By comparison, Tesla’s Model Y dual motor now starts at $47,240, while the Y Long Range rises to a starting price of $50,240, and the Y Performance version starts at $54,240. All have all-wheel drive. 

Affordability is key

Automotive industry experts say affordability is key to driving widespread acceptance of electric vehicles as the U.S. tries to loosen its dependency on fossil fuels as well as gas-powered cars.

Many Americans aren’t yet sold on electric cars, a recent poll by The Associated Press-NORC Center for Public Affairs Research and the Energy Policy Institute at the University of Chicago poll shows. While approximately 4 in 10 U.S. adults said there were somewhat likely to switch from gas-driven vehicles in their next purchase, for most Americans high prices and too few charging stations remain strong deterrents, according to the survey. 

Tesla’s upward price tweak comes less than a week after it had lowered the starting price of the Model Y SUV to $46,990. Tesla has been jockeying for dominance in the electric vehicle market, slashing prices dramatically on several versions of its electric vehicles this year, making some of its models eligible for a new federal tax credit that could help spur buyer interest.

Tesla’s hatchback, the Model S, now costs $89,990, down from $94,990 a week ago, according to its website. The upgraded Model S Plaid’s price fell to $109,990 from $114,990 a week ago. Tesla’s mid-sized sedan Model X is now $99,990, down from $109,990 while the price for its Plaid version fell to $109,990 from $119,990. 

The Ford Mach-E only is eligible for a $3,750 U.S. federal tax credit this year, while the two top-selling Tesla models are eligible for a $7,500 break.