After Tesla reduced the prices of its vehicles, Ford is increasing production of its popular Mustang Mach-E electric SUV and lowering its sticker price. The change is a significant rollback of the price increases that Ford announced last summer for the 2023 models; however, customers may still pay a little bit more than they did before the price increases.

The Ford Motor Company’s first truly electric vehicle was the Mustang Mach-E, a midsize electric family SUV. Ford is betting that new car buyers will try out the battery-powered future with the Mach-E, which is priced and aimed directly at the Tesla Model Y, which starts at $53,490. Since then, the reliable Ford F-150 Lightning has joined the electric Ford lineup. However, the Mach-E is still regarded as an essential step in the company’s electric-powered expansion.

Ford’s vice president of electric vehicle programs, Darren Palmer, told late last year that the Mach-E was completely sold out, and the company was holding off on launching it in additional global markets to catch up with demand in the United States.

“We could sell it out at least two or three times over,” he said a the time.

The most expensive SUV models saw the largest price reductions announced by Ford on Monday, just as those models had seen the largest price increases. The Mustang Mach-E GT Extended Range, a high-performance SUV, now costs approximately $64,000, down $5,900 from its previous price of $69,900. However, prior to the August price increases, that model had cost approximately $62,000.

Ford also said that it was adding more standard features to the vehicles, including advanced driver assistance features, when it announced those price increases.

The standard range model with rear-wheel drive that is the cheapest Mach-E was reduced in price by $900, going from approximately $46,900 to $46,000. The extended range battery pack option dropped in price by itself from $8,600 to $7,000.

After raising prices in 2022, Tesla announced earlier this month price cuts for its electric vehicles of up to 20%.

When Ford made the price hikes public last summer, citing problems with its supply chain, the automakers said they would keep an eye on the market through the next model year.

Last summer, Ford made the announcement that it would increase the Mach-E’s production as it added capacity for more battery production. Also, at the end of August, the automaker said that it was reopening order banks for the Mach-E, which had been closed while the company was trying to fulfill existing orders.

Ford stated that the new lower price will be paid by Mach-E customers who complete the transaction following today’s announcement. According to Ford, the automaker will directly contact Mach-E customers whose vehicles will be sold after January 1, 2023.

The Internal Revenue Service says that at least some versions of both models are currently eligible for federal tax credits for electric vehicles. However, the tax rules treat both models as cars, not SUVs, unless they have a third row of seats.

This means that if the Mach-E only has two rows and the Model Y only has two rows, tax credits are available if the car costs less than $55,000. Buyers of Model Y variants with a third row of seats, an option that costs $4,000, may be eligible for tax credits with a sticker price of up to $80,000. There is no third row of seats in the Mustang Mach-E.

When the vehicle is actually delivered to the customer and whether the customer meets the annual income requirements may influence the final amount of the tax credit.