The price of Ford's electric Mustang Mach-E has been reduced by up to $8,100.

In January, sales of the Mustang Mach-E electric SUV fell sharply, prompting Ford to cut prices on the vehicle by up to $8,100 on Tuesday.

The 2023 Mach E model year from the No. 2 U.S. automaker now has a suggested retail price of $39,895, a decrease of $3,000 from the previous year. The higher-end Mach-E GT spec will cost $7,600 less, at $52,395, while other versions including the extended-range premium version will drop in price by $8,100 to $48,895.

Ford announced price cuts as part of its ongoing efforts to "optimize sales growth and customer value."

In January, the number of U.S. sales of the Mach-E by the Dearborn, Michigan-based automaker decreased by 51% to 1,295.

The Mach-E no longer qualifies for a $3,750 tax credit as of January 1st due to new U.S. Treasury Department battery sourcing requirements aimed at reducing the electric vehicle industry's reliance on China. Additionally, many other models have also lost their tax credits.

Since the beginning of the year until February 6th, the Treasury has repaid auto dealers approximately $135 million in advance point-of-sale consumer EV tax credit payments. Over 25,000 time of sale reports have been received by the Internal Revenue Service, including more than 19,500 with advance payment requests.

The Model Y crossover by Tesla, which competes with the Mach-E, has a starting price of $42,990 before federal tax credits of $7,500.

In an effort to increase demand and capture more market share, Tesla, the EV manufacturer led by Elon Musk, initiated a price war last year.

Instead of concentrating on electric vehicles, Ford and other legacy automakers are now prioritizing higher-margin hybrid and gas-powered models.

In January, Ford announced that it would decrease the production of its F-150 Lightning pickup truck, reducing production at its Michigan Rouge Electric Vehicle Center to one shift starting April 1.