Buyers will face the higher price tag on the electric vehicle (EV) when order banks for the 2023 model reopen on Tuesday, CNBC reported. The increase comes just weeks after President Joe Biden signed the Democrats’ Inflation Reduction Act, a massive climate spending bill that handed out tax credits to Americans willing to purchase certain EVs.
“Ford is adjusting the MSRP on the Mustang Mach-E due to significant material cost increases, continued strain on key supply chains, and rapidly evolving market conditions, and will continue to monitor pricing across the model year,” the Michigan-based motor company said.
The Mustang Mach-E 2022 models were priced between 44,000 and $62,000, but the 2023 makes of the EV will cost as high as $70,000 with the cheapest option being $47,000. Earlier this month, Ford also increased prices on its electric pickup truck, the F-150 Lightning, for similar reasons, according to CNBC. Tesla, Rivian, Lucid, and GM have also raised prices on EVs this year.
Car manufacturers are increasing EV prices after electric battery costs skyrocketed during the COVID pandemic. Materials such as cobalt, lithium, and nickel have become harder to get, with China dominating cobalt and lithium production. That, coupled with supply chain issues, resulted in the cost of raw materials for EV production doubling from March 2020 to May 2022.
Biden signed the Inflation Reduction Act on August 16, with full Democratic support in the Senate, as every single Republican opposed. Along with the bill’s nearly $370 billion spent on climate, the legislation also grants tax credits of up to $7,500 for those who buy certain EVs that are assembled in North America.
“American auto companies, along with American labor, are committing their treasure and their talent — billions of dollars in investment — to make electric vehicles and battery and electric charging stations all across America, made in America,” the president said at the bill’s signing.
According to the Department of Energy, the 2022 Ford Mach-E qualifies for Biden’s tax credit. The 2023 model, however, did not appear on the department’s list of EVs that qualified.