Ford is cutting prices for the Mustang Mach-E again as the electric vehicle price war enters its second year

The Ford Mustang Mach-E has become more affordable after the automaker announced a major price cut for 2023. New tweaks will bring at least one version of the Mach-E under $40,000 for the first time.

The Mustang Mach-E was the best-selling electric SUV in the US in 2023. But to get there, Ford had to wage a brutal price war with Tesla that is now in its second year. The Elon Musk-run company has seen its market share in the United States decline quarter after quarter, but Tesla still controls more than 50 percent of the electric vehicle market.

The price cuts are also a reflection of the new reality where EV sales are not growing as quickly as in previous years. Demand is declining as more customers search for the right price, as well as more evidence that charging infrastructure will operate reliably.

Ford spokesman Martin Gunsberg said the new prices aim to “adapt to the market to achieve the optimal combination of sales growth and customer value.”

Here's a breakdown of pricing for the new Mustang Mach-E compared to the previous MSRP.

Premium models with extended-range batteries, for either rear- or all-wheel drive, get the biggest discounts at $8,100 after deducting the sticker price. The new price for the Select RWD model will be just under $40,000, which seems to be an important milestone for Ford's leading electric car.

Ford is also adding new incentives for leased vehicles, offering a “Red Carpet Lease Cash Incentive” of $7,500, when the vehicle is leased through Ford Credit, the company's in-house financial division. That would be in addition to the federal electric vehicle tax credit that Ford Credit passes on to consumers, resulting in lower monthly payments.

The Mustang Mach-E is only eligible for a $7,500 tax credit when leased. The electric vehicle is not currently eligible for credit for customers who want to purchase or finance the Mach-E thanks to its battery supply chain.