Ford could honor rebate for new Mustang Mach-E owners after dropping price

Yahoo Finance autos correspondent Pras Subramanian breaks down Ford's decision to reprice its Mustang Mach-E amid potential EV tax credits.

Video transcript

DAVE BRIGGS: Ford also took a page out of Tesla's playbook. It is cutting the price of its Mustang Mach-E crossover, but there's a big difference. What is it?

PRAS SUBRAMANIAN: So, in the release, the bond released yesterday talked about the Mustang Mach-E price cuts ranging from 600 bucks to 6,000, talking about how if you have not gotten your car yet and you have an order in, you'll actually get-- have those price cuts honored. But also, if you've actually taken delivery on January 1st of this year, they're going to retroactively-- they'll contact you directly about some sort of compensation, right?

So, you know, I talked to some experts recently, and they said that for the smaller price cuts, it could be maybe free EV charging, something like that. But for the larger $5,900 price cut, you might actually get a check cut to you in that amount. So that's a pretty big deal, something that Tesla is not doing. They said if you bought the car a day before, we're not going to honor that for you, right?

And another potential big wrinkle is that it might bring you underneath the cap for the IRA, so not only are you going to get that price cut, but also maybe a $7,500 tax credit. So really big, kind of double whammy in your favor if you're a Ford Mach-E owner that you're not getting from Tesla.

SEANA SMITH: Massive, and you would be very, very pleased if, in fact, you do get that if you recently had bought this vehicle. Pras, we have Ford reporting before the bell tomorrow. GM was earlier this week. Very, very strong results. What are we expecting to hear tomorrow?

PRAS SUBRAMANIAN: Yeah, it's a good point. GM really knocked it out of the Park, so Ford kind of has to have to have a repeat, sort of back-to-back sort of showing here. Looking at a high level, $40.6 billion for the quarter. That's up 15% year over year, and adjusted EPS around $0.62 a share. But really going to watch that EBITDA guidance. Do they hit their 2022 ? Numbers what's it going to be for 2023? And what about margins? Are we going to see these sort of price cuts and discounts affecting their margins, which are going to be probably around 7% in 2022?

We mentioned the Mustang Mach-E price cuts, but also Ford might have to sort of discount some of their higher priced truck offerings. We heard last quarter that John Lawler, CFO, talking about how people were actually getting lower trim trucks in order to get the car they wanted, but is going to afford the Platinum version or the King Ranch version.

DAVE BRIGGS: Yeah, that Ford F-150 Lightning has been selling like hotcakes. Pras Subramanian, Seana is laughing because I--

SEANA SMITH: You love it.

DAVE BRIGGS: --I love--

SEANA SMITH: You love it. Whenever we can talk about it, we do.

DAVE BRIGGS: I heart you, Ford F-150 Lightning. Thank you, Pras. Good to see you, man.