Ford’s Mustang Mach-E is set to lose its eligibility for the US tax credit starting January 1, 2024. At the same time the Detroit-based automaker is now allowing its dealers to advertise the electric crossover at prices below the Manufacturer’s Suggested Retail Price (MSRP).
In a memo sent to dealers this week, Ford revealed that it is unlikely that any Mustang Mach-Es will qualify for the tax credit in 2024. Currently the Mach-E is only eligible for $3,750, or half of the full tax credit. The cause behind this change lies in updates to the Inflation Reduction Act (IRA), which introduces new rules for EVs’ eligibility, excluding those with battery components from countries designated as “foreign entities of concern” by the US government.
Ford, however, did not comment on the status of the F-150 Lightning in the memo, according to a report from CarsDirect. These are the same changes that made Tesla confirm two variants of the Model 3 will see their tax credit eligibility halved next year.
With the Mach-E set to lose its tax credit status, Ford has taken another significant step by allowing dealers to advertise prices below the Manufacturer’s Suggested Retail Price (MSRP). This marks a departure from a rule introduced four years ago, where Ford aimed to maintain upfront pricing through its Ad Covenant Program. The Mach-E is no longer part of this program, and dealers are now free to advertise prices from a starting point below MSRP. Whether they actually will remains to be seen.
Even with these changes, it remains to be seen whether Ford’s new advertising approach and potential tax credit loss for the Mach-E will significantly impact its position in the increasingly competitive electric vehicle market, especially with strong contenders like Tesla and other manufacturers offering attractive alternatives.