Liam Denning, Columnist

Tesla Wanted a Price War. Ford Showed Up.

The legacy automaker is paring back the cost of its Mustang Mach-E model after Tesla discounted its competing EVs, portending tighter margins for both companies this year.

May 3, 2023 at 6:28 PM UTC

By Liam Denning

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

Ford’s Mustang Mach-E GT, a new combatant in Tesla’s EV price wars. — Ford’s Mustang Mach-E GT, a new combatant in Tesla’s EV price wars.
Photographer: Emily Elconin/Bloomberg

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Elon Musk got what he asked for: Ford Motor Co. has officially joined the electric vehicle price war. The collateral damage to Tesla Inc. could be brutal.

Ford reported results late Tuesday. The short story is that it blew past earnings estimates, mostly because of good margins in the North American business (read: US drivers still love F-150 trucks). But it only reiterated guidance for the full year, meaning Ford’s faith in those drivers’ fortitude is slipping. Moreover, now that Ford reports its electric business separately, everyone can see it made a less-than-princely operating margin of negative 102% on EVs in the quarter.