This is the second time Ford has reduced prices this year after a series of price cuts by rival Tesla, in what seems to be a full-blown clash between the two EV titans.

Ford said it is also increasing the range for standard-range battery models as it increases production of the electric crossover SUV in the second half of the year.

Prices for most Mach-E models were cut by $3,000 or $4,000 depending on the version or by as much as 7.8%, Ford said. The price of the Mach-E Premium rear-wheel drive version will drop from $50,995 to $46,995.

Ford CEO, Jim Farley, told analysts Ford does not intend to pursue EV sales volume "…at any cost. We are not going to cut prices just to gain market share."

Farley's stance contrasts with Tesla CEO Elon Musk's statement last month that Tesla could cut profit margins on vehicle sales to zero and make up the difference through sales of software-enabled services.

Ford shares closed down 2.2% at $11.80 Tuesday and fell 1.5% in after-hours trading after it reported first quarter earnings.

Last month, the federal EV tax credit for the Mach-E fell by half to $3,750 from $7,500 after new battery-sourcing requirements took effect.

Mustang Mach-E’s US sales fell 20% in the first three months of the year. Ford said Tuesday that shipments of the Mustang Mach-E were limited in the first three months of the year to make industrial changes that will nearly double manufacturing capacity.

In January, Ford cut prices of the Mustang Mach-E by as much as $5,900 per vehicle after hiking prices in August by $3,000 to around $8,000, citing supply-chain issues and higher material costs.

Ford said all standard-range models will now be powered by lithium iron phosphate (LFP) batteries, which allow vehicles to gain an additional 45 units of horsepower and which improve the targeted EPA-range estimates.

On 1 May, Tesla raised prices in a range of up to $290 in Canada, China, Japan and the United States after the company had slashed prices of its top-selling vehicles since the start of the year.

The hike was Tesla's first involving its two top-selling models at the same time in multiple markets, although prices across its line-up are much lower than in January, after a round of discounts.

(On 4 May 1$=R18,26)