How The Ford Mustang Mach-E Will Actually Make Money

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Reining in battery costs is key to turning a profit on the Ford Mustang Mach-E.

First thing's first: the upcoming Ford Mustang Mach-E electric SUV is without a doubt competitively priced for what it is, and may beat the Tesla Model Y to market here in America. But that's just the thing; with a starting MSRP of around $45,000 before state and federal tax credits, and lithium-ion battery packs being as expensive as they are, there's some question as to how Ford can possibly expect to turn a profit on the long-range pure-electric crossover.

Ford is said to have a simple answer to this: synergy. Automotive News reports that the 2021 Ford Mustang Mach-E will share its battery cells with the forthcoming Ford Transit BEV, all but guaranteeing that LG's Ford battery cell production line in Poland is running at maximum capacity and thus leveraging economies of scale.

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The production line will run 24/7, which is essential to keep battery costs down, Ford's Head of Global Powertrain Purchasing, Lisa Drake, told Automotive News.

"When you fill a cell line to exact capacity that is your lowest price," she says. "You never, ever want it to be idle."

Typically, each Ford vehicle is developed "with its own market equation," Drake went on to say. "Then we see if we can share components. But because the battery is the most expensive part of the car, we looked... to see where we can share it across other products," something that was facilitated by the Mach-E's flexible architecture.

It runs counter to how Ford is accustomed to looking at vehicle development.

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The first Ford Mustang Mach-E deliveries will start late in 2020, with some variants waiting until early next year to go on sale. Despite some controversy regarding the crossover's name, it has already proven popular in the US market, amassing tens of thousands of paid customer reservations in the weeks since its November, 2019 introduction. The special First Edition model sold out in the United States within two weeks.

Ford plans to build some 50,000 units during the Mach-E's first full year of production at its Cuautitlán plant in Mexico. The battery-electric Transit with which it shares its battery cells will hit the market sometime next year.

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