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Published: Feb 01, 2023 6 min read
Close-up of a person charging their electric car
Money; Getty Images

It’s highly unusual for a car manufacturer to slash the MSRP of a vehicle after a launch. But that’s exactly what’s happened to the four best-selling electric vehicles in the U.S. now that Ford has joined Tesla in announcing major price cuts.

Could this be the start of full-fledged electric car price war? The two manufacturers’ moves certainly put pressure on other players in the EV industry to make cars more affordable, according to Alain Nana-Sinkam, SVP of business development at the automotive pricing company TrueCar.

"There hasn't been a whole lot that's been conventional about the way Tesla has gone to market in selling vehicles, but the concept that there would be significant changes in manufacturer suggested retail prices in the middle of the model year is a very uncommon thing in our industry, especially at these levels — thousands of dollars," he says.

Whether Ford and Tesla's competitors will announce price cuts of their own remains to be seen. The overarching trend in the market is actually the opposite: Prices have been rising steadily, and the average new car is now selling for an all-time high of nearly $50,000.

Price cuts aren’t the only way to make cars more affordable. The more traditional way to accomplish that and entice buyers is with incentives, which can take the form of financing deals or cash rebates. But the option of cutting sticker prices has particular appeal in the EV market right now because cars that cost over certain amounts (which depend on the type of vehicle) aren't eligible for new EV tax credits of up to $7,500.