Ford Just Released an Electric Mustang SUV to Challenge Tesla

Ford Motor Co. is reinventing one of its marquee models -- the Mustang muscle car -- as a battery-powered crossover to become a player in the electric-vehicle market that is expected to take off in the coming decade.

In a splashy ceremony Sunday ahead of the Los Angeles Auto Show, the carmaker unveiled the Mustang Mach-E, a swoopy hatchback with distinctive pony-car haunches and familiar shark nose that it claims has the power to take on Porsche. When it goes on sale next fall, Ford hopes to convince mainstream buyers its electrified Mustang is an alternative to the Tesla models dominating the EV market.

And Ford, which exited the battery-car business last year when it pulled the plug on its slow-selling Focus EV, is betting it’s cracked the code on turning a profit on plug-ins. By building the Mach-E in Mexico, where labor costs are low, and with a price starting at $43,895, the automaker says it will avoid the losses automakers typically suffer selling high-cost EVs.

The company is even considering making the car in China, depending on how the trade war plays out, Ford Chief Executive Officer Jim Hackett told Bloomberg News.

The Mach-E will make a profit “on vehicle one,” he said in a Bloomberg TV interview. “That’s surprising a lot of people because electrics have not had a history of making money. This will.”

Hackett said it will turn a profit because the vehicle “creates the passion that follows with Mustang” and prices start in the mid-$30,000 when U.S. subsides on electric cars are factored in. “So it’s attractive to customers.”

Ford is building it in Mexico because it had an open factory there and it needed to be overhauled to build an electric vehicle, Hackett said. “As we start to adopt more electric vehicles — we had capacity down there, we had no capacity in the United States — we’re going to have electric capacity here in the United States. They’ll be building other electric platforms.”

Still, it’s a high-risk gambit. The Mustang is Ford’s signature sports car, having sold more than 10 million units since it debuted in 1964 with simultaneous cover stories in Time and Newsweek. When Ford decided to abandon the traditional passenger-car business last year, it spared only one model: The Mustang.

For more than half a century, the Mustang has embodied high-octane power and unbridled strength. And Ford will continue to make gasoline-fueled versions of the classic muscle car.

The Mach-E is not only the first electric version of the Mustang, it’s also the first time it has been configured into a sport utility vehicle. That will test the elasticity of a brand built on low-slung speedsters.

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