© Reuters. Ford (F) CEO says EV price cuts are ‘a worrying trend’
Ford Motor Company (NYSE:) CEO, Jim Farley told a Wall Street Journal forum on Wednesday that price cuts in the electric vehicle market “is a worrying trend”.
Rival EV automaker Tesla Inc (NASDAQ:) incited what others are calling a price war after the EV giant adjusted prices several times to spark demand, even at the expense of margins.
Farley compared the price war in the EV market to Henry Ford’s series of price cuts for the Model T starting in 1913. But the Ford Chief said the company founder’s strategy ultimately put Ford at risk.
“You do not want to commoditize the product,” Farley said.
“The resale value for people who bought at higher prices is awful. They never forget,” Farley said. Ford will follow Tesla price cuts for models such as the Mustang Mach-E that competes head-on with Tesla’s Model Y, he said. “There’s a limit to how far we’ll go.”
Ford on Tuesday announced a price cut of up to 8% on its Mustang Mach-E electric vehicle in response to moves by Tesla, the second cut the automaker announced this year.
Shares of F and TSLA are up 1.44% and 2.57%, respectively, in afternoon trading on Wednesday.
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