Ford hits back at Tesla's price cuts by lopping nearly $6,000 off the Mustang Mach-E

• A standard Mach-E now starts at $45,995.
• Ford is hitting back after Tesla started an EV pricing war.

Ford is slashing the price of its electric Mustang Mach-E by as much $6,000, keeping pace with Tesla's sweeping price cuts, announced just weeks before.

Ford is also increasing production of the Mach-E in an attempt to shorten wait times, which Marin Gjaja, chief customer officer of Ford's electric Model e division, said can be up to 150 days currently.

Mach-E customers already waiting on their order will be given the adjusted price when their vehicle arrives, and current owners will hear from Ford for "personal offers" designed to refund the difference in price they paid before the cuts, Gjaja said on a phone call with reporters.

The price reductions for the Mustang Mach-E vary by trim level and performance package. A standard Mach-E now starts at $45,995, down $900 from the former sticker price. At the highest end, the Mach-E GT with extended range now goes for $63,995, a $5,900 reduction from the previous price.

Earlier in January, Tesla rolled out discounts ranging from 6% to 20% on the popular Model 3 and Model Y vehicles – a move analysts said could kick off a price war with Ford and GM.

Elon Musk's long-term play on the price cuts, which Deutsche Bank estimates could cost the company $7 billion in profits this year, could protect its customer base amid rising competition and increase its market share. Investors appear to be on board with this strategy, particularly after Musk quelled lingering concerns on a recent earnings call.

Ford, however, operates on slimmer margins. CFO John Lawler said in June that the Mach-E's initial profitability was "wiped out" by rising commodity costs. Gjaja would not say how the price cuts impact Mach-E's profitability, only saying it would vary by trim level.

"Obviously, our competitors are also adjusting their prices," Gjaja said. "We're having to respond."

Gjaja said the price cuts for the Mach-E are also a direct response to new EV tax credits under the Biden administration's Inflation Reduction Act, which has price caps for models to qualify for a $7,500 tax credit.

Ford CEO Jim Farley has publicly set his sights on Tesla, vowing last spring to unseat Musk's car company as the top seller of electric vehicles. The Dearborn, Michigan-based automaker is also making changes to the way it sells EV to more closely emulate Tesla's direct-sale model, a move that has rankled dealers.