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- Ford CEO Jim Farley said Tesla's price could spark a price war for electric vehicles.
- Farley said Tesla’s effort to increase sales is "completely rational" and shouldn't surprise anyone.
- Tesla has cut the price of their cars multiple times in this year.
Ford CEO Jim Farley stated that Tesla's price reductions could spark a price war for electric vehicles and turn some into commodities.
Farley, who was reported by Bloomberg to have spoken at a charity event held in Detroit, said that Tesla's efforts to increase sales are "completely rational" and shouldn't surprise anyone.
Elon Musk has slashed prices six times in the last year. This makes EVs cheaper than ever before. Tesla's entry level Model 3 sedan is now less than $40,000, the cheapest model.
Ford cut the prices of its Mustang Mach-E plug-in range between 1% and 8% in January.
Farley stated that "price wars are raging everywhere." "Who's going blink for growth?"
Tesla's price reductions are intended to undercut rivals and increase market share. However, the strategy has been costly for the company.
According to Refinitiv, on Wednesday, the automaker reported revenue of $23.33 Billion, which was in line with expectations. Its profits were hit, as its net income fell by 24% on an annual basis to $2.51 Billion during the three-month period ending March 31, according to Refinitiv.
Seth Goldstein is an equity strategist at Morningstar. He told Insider that Tesla's price reductions had legacy automakers in a panic. Ford, who had previously predicted that its EV business will continue to lose money until 2026 at the latest, is now faced with "the potential of having cut prices or even worsen profits."
Goldstein stated that the response of these people is interesting.
Reuters reported that Farley stated at the Detroit event, Ford would concentrate on areas with less competition such as vans and pickup trucks.
Insider's comment request, which was made outside of normal business hours, did not receive a response from Tesla or Ford.
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By: bnolan@insider.com (Beatrice Nolan,George Glover)
Title: Ford CEO Jim Farley says Tesla price cuts could start an EV price war
Sourced From: www.businessinsider.com/ford-tesla-price-cuts-spark-ev-price-war-2023-4
Published Date: Fri, 21 Apr 2023 11:03:56 +0000
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