New Delhi (India), 4th May 2023: Ford CEO Jim Farley said on Wednesday that price cuts in the electric car market were a “worrying trend,” following a price drop for its Mustang Mach-E in response to a series of reductions by rival Tesla (TSLA.O).
The US car maker, Ford announced a price decrease of up to 8% on its Mustang Mach-E electric vehicle on Tuesday, the automaker’s second price cut this year.
Farley compared the EV price war to Henry Ford’s series of Model T price drops beginning in 1913. However, the Ford CEO stated that the company founder’s strategy had ultimately put Ford in jeopardy.
Farley, at a Wall Street Forum said, “You do not want to commoditise the product…The resale value for people who bought at higher prices is awful. They never forget.”
Ford will follow Tesla’s lead on price cuts for products like the Mustang Mach-E, which competes directly with Tesla’s Model Y. But he said, “There’s a limit to how far we’ll go.”
Elon Musk, CEO of Tesla, praised Ford’s EV approach. He took to Twitter, another one of his companies and wrote, “Always tough with margins for new vehicle lines, especially when there are major technology shifts…I think Ford’s overall strategy with EVs is smart. The electric F-150 (Lightning) has high demand.”
Farley also stated that Ford has no plans to discontinue Apple CarPlay software, which allows users to mirror their smartphone screens in a vehicle’s dashboard. General Motors Co recently announced that CarPlay will be phased out in future vehicles.
“We kind of lost that battle ten years ago,” Farley said when he commented on streaming entertainment into a car. Furthermore he said, “70% of Ford customers in the U.S. are Apple customers.”
