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Ford's new Mustang Mach-E electric SUV isn't just a "compliance car"

Tuesday, November 19, 2019 by Robinhood Snacks | Disclosures
_Wouldn't it be great if this baby didn't need gas?_

Wouldn't it be great if this baby didn't need gas?

Biggest product unveil since the Model T... Ford needed something big. So it hired a former Michigan Wolverine football player to be CEO. That's when Jim Hackett ordered designers to build an electric SUV inspired by its iconic Mustang sports car. On Sunday, Ford unveiled that Mustang Mach-E. Shares barely budged because electric cars are just a rounding error for Ford, but this signals a new focus on electric.

Don't call it a "compliance car"... Don't. Car companies that didn't completely embrace electric (that's everyone except Tesla and maybe Toyota/Nissan/Honda) still offered electric or hybrid cars — but those were "compliance cars":

  • You love profiting off SUVs and pickup trucks, which get bad gas mileage.
  • But the government requires that you hit minimum fuel efficiency standards for your whole vehicle fleet.
  • So you build compliance cars — electric or hybrid cars with incredible (or infinite) miles per gallon.
  • Picture this: It's like the table full of Sprite, Dr. Pepper, and fruit punch in the corner at a sophomore party. School rules require just as much alcohol as non-alcoholic.
  • But the Mustang Mach-E is built to compete, not comply.
THE TAKEAWAY

Competition in Elon's mirror is closer than it appears... Tesla's first "everyman" electric car kinda has a rival in the low-ish priced Mach-E. Ford's starts at about $44K, which falls to $37K after a federal tax credit — that's about the same price as Tesla's lowest priced Model 3. Plus, the Mach-E is 100% SUV, which Americans always call shotgun on.