(Reuters) - Lucid Group said on Thursday that customers will get a $7,500 credit on buying certain variants of the Air luxury electric car, revving up a price war started by market leader Tesla Inc (NASDAQ:TSLA).
The battle has made it much more difficult for money-losing U.S. startups such as Rivian Automotive Inc and Lucid to grab market share at a time when high borrowing costs and inflation have pinched consumer wallets.
Ford has also slashed prices of its electric crossover Mustang Mach-E by as much as $5,900 in response to Tesla's price cuts.
Lucid's credit will be available to customers from Thursday and applies to the Touring and Grand Touring models of the Air series purchased before March 31 this year.
The company's cars are not eligible for a $7,500 federal tax credit under the Inflation Reduction Act passed in August last year as the price cap for the benefit stands at $55,000. Air Touring retails from $107,400, while the Grand Touring model starts at $138,000.
How EV prices stack up against Tesla's cars https://www.reuters.com/graphics/TESLA-ELECTRIC/STARTUPS/zdpxdrgrzpx/chart.png
"We think our customers still deserve a $7,500 credit for choosing an EV," said Zak Edson, Lucid's Vice President of Sales and Service.
Lucid said in November that it had more than 34,000 orders in the third quarter, down by 3,000 from the second quarter, after it delivered about 1,400 vehicles and saw cancellations.