Demand for EVs has deteriorated over the past year as buyers struggled with inflationary headwinds and higher borrowing costs.

The automaker's base Select variant of Mach E now carries a suggested retail price of $39,895, compared with its prior price of $42,995, while the higher-end Mach E GT spec will cost about $7,600 less, at $52,395.

Tesla's Model Y crossover, which directly competes with the Mach-E starts at $42,990 before federal tax credits of $7,500.

The Elon Musk-led EV maker sparked a price war early last year in a bid to spur demand and grab more market share.

Ford and other legacy automakers have slowed their EV push to instead focus on their higher-margin hybrid and gas-powered models.

(Reporting by Nathan Gomes in Bengaluru; Editing by Krishna Chandra Eluri)