Ford had grandiose ambitions for the all-electric Mustang Mach-E in China, believing that it could dethrone the Tesla Model Y by selling it directly to consumers through its ‘Ford China 2.0’ plan. However, the car manufacturer has since abandoned this sales model and the Mustang Mach-E is selling in far more limited numbers than Ford had expected.
The company kicked off its direct-sales business in 2021, mimicking the successful strategy pioneered by Tesla. It also launched an EV subsidiary in Nanjiang around the same time and soon after, launched the Mustang Mach-E onto the local market, priced from 265,000 yuan ($36,275). Fast forward to 2023 and Ford is only selling a few hundred Mach-Es in China each month and its market share of the local EV space has fallen to a mere 2%.
It has been revealed by The Wall Street Journal that Ford shut down its direct-sales business in China last month. As such, the Mustang Mach-E, as well as other local electric offerings like the Ford Evos SUV and Escape PHEV, will be sold through dealerships.
“Their EV strategy for China was the Mach-E. When that didn’t work out, they didn’t have anything,” Sino Auto Insights founder Tu Le said.
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Interest in the Mustang Mach-E has not been as strong as Ford has expected. A key reason for this is that it has a shorter range than many other EVs on sale, like the Xpeng P7 and the Tesla Model Y. In addition, it is not as laden with technologies and features as some of the local alternatives. The Wall Street Journal also notes that Ford underestimated the crowded EV market in China, had execution problems, and failed marketing and sales strategies.
In addition, the launch and deliveries of the Mustang Mach-E were delayed for several months while Ford was experiencing battery procurement issues as supplier BYD shifted its focus to a different kind of battery.
As of last month, Ford’s joint venture with Chongqing Changan Automobile had taken control of Mach-E sales while Ford looks to establish a “lower investment, learner, much more focused business in China,” chief executive Jim Farley confirmed.
