He hailed an impending “huge moment”, pointing to the rate at which prices of hybrids and electric cars are aligning in the US, once EV subsidies are factored into the equation.
US president Joe Biden’s Inflation Reduction Act last year introduced a $7500 (£6000) tax credit toward the purchase of an electric car. From this year, qualifying cars’ batteries must not use components sourced from ‘a foreign entity of concern’, which includes China and Russia.
The Ford Mustang Mach-E has become ineligible, owing to its use of a lithium-iron-phosphate (LFP) battery pack from China’s CATL. But were it eligible, it would start from $35,495 (£28,000) in the US – less than the combustion-engined Explorer (unrelated to the electric Explorer arriving in the UK later this year), Edge or Bronco SUVs.
Farley noted that Tesla “found this out first”, nodding to the immense popularity of the Model 3 and Model Y. The Model Y was the world’s best-selling car in 2023, according to figures published by industry analyst Jato Dynamics. It starts from $32,890 (£26,000), including the Inflation Reduction Act credit.
“We learned very quickly, and I want to say that no one will be immune to this reality,” said Farley.
