What happened
Shares of Rivian Automotive (RIVN 2.84%) fell on Monday after Ford (F 0.47%) cut the price of its popular Mustang Mach-E crossover. As of 2:25 p.m. ET, Rivian's stock price was down more than 7%.
So what
Ford reduced the manufacturer's suggested retail price (MSRP) on the Mustang Mach-E by as much as $5,900 on some models. The auto giant also announced its plans to ramp up production of the all-electric sports utility vehicle (SUV). The Mustang Mach-E was the third-best-selling electric vehicle (EV) model in the U.S. in 2022.
Ford said the price cuts signify its desire to provide more value to its customers, while the production increase is intended to reduce buyer wait times. Ford believes that, together, these moves will help it gain market share in the booming EV industry. The automaker currently stands as the No. 2 EV manufacturer in the U.S.
"We are not going to cede ground to anyone," Ford executive Marin Gjaja said in a press release.
Now what
Ford's announcement follows Tesla's (TSLA 1.85%) decision to cut prices on its EVs earlier this month. Tesla CEO Elon Musk credited the price reductions with helping to boost the EV leader's sales.
"Thus far in January, we've seen the strongest orders year to date than ever in our history," Musk said during Tesla's fourth-quarter earnings call. "We currently are seeing orders at almost twice the rate of production."
"Price really matters," Musk went on to state.
Tesla's and Ford's aggressive discounts are thus likely to pressure Rivian's EV sales, at a time when the fledgling automaker is already struggling with rising costs and mounting losses.
