Tesla and Ford engaged in an EV price war.
Last week brought a mix of news in the electric vehicle (EV) space, including the U.S. government pausing on plans to hand out tradable credits to EV manufacturers under a renewable fuel scheme. The plan would have given EV automakers credits for charging vehicles using power generated from renewable natural gas or methane. The EPA recommended adding EVs to the U.S. Renewable Fuel Standard last year, but supporters of the plan are now worried about potential legal challenges.
Tesla made headlines by unexpectedly increasing the prices of its Model 3 and Model Y vehicles in the United States, China, Japan, and Canada. This was the first time Tesla has raised the price of the Model 3 since January, after several price cuts earlier in the year. Tesla also raised the prices of its Model S and Model X vehicles in China, positioning them in the premium segment of the country’s electric car market.
Ford followed Tesla’s unexpected price hikes by slashing the prices of its Mustang Mach-E by $3,000 to $4,000, depending on the specific version. Despite these concerns, Ford CEO Jim Farley said Ford would face Tesla head-on and cut prices on models such as the Mustang Mach-E, which directly competes with Tesla’s Model Y.
General Motors (GM) started the week off with a cost-cutting move, reportedly letting go of several hundred full-time contract workers over the weekend. This move is part of the company’s larger goal to reduce its budget by $2 billion by the end of next year. Unfortunately, things did not improve for General Motors over the course of the week. Reports emerged that the company had pleaded guilty in a worker safety case related to the death of an employee at its St. Catharines facility in Canada. The company was fined $325,000, and this was the second injury at the Canadian plant this year.
Fisker ended its week on a high note as the American automaker announced that it had delivered the first brand-new Fisker Ocean all-electric SUV to a customer in Denmark. CEO Henrik Fisker personally handed over the keys to the lucky customer, who received a limited launch edition of the electric SUV. This delivery comes 24 weeks after Fisker officially began production in November of last year.
- The U.S. government’s hesitation to add EVs to the renewable fuel program has implications for the industry’s future. Supporters of the plan believe it would incentivize automakers to transition to renewable energy sources, while opponents argue that the credits should be reserved for biofuels, as intended. It remains to be seen how the EPA will address these concerns and whether it will ultimately add EVs to the RFS.
- Tesla’s unexpected price hikes may be a response to the global chip shortage, which has affected production across the industry. Raising prices could help manage demand and ensure profitability while the company works to secure more chips. However, this move could also have negative consequences, such as encouraging consumers to consider competitors with lower prices.
- Ford’s decision to slash prices on the Mustang Mach-E shows that the company is willing to engage in a price war with Tesla to gain market share. However, this strategy has its limits, and the ongoing price cuts could impact the profitability of both companies in the long run.
- GM’s cost-cutting measures have drawn criticism from some, who argue that the company should prioritize investing in EVs and other new technologies. The guilty plea in the worker safety case highlights the importance of maintaining safe working conditions in the auto industry, and GM will need to take steps to address these concerns and prevent future incidents.
- Fisker’s delivery of its first electric SUV is a significant milestone for the company, which has faced its share of challenges over the years. The Fisker Ocean has received positive reviews for its design