Ford is planning an EV under $40K. Can it compete with Chinese vehicles?

One of North America’s largest automakers appears to be betting on a new strategy for selling electric vehicles: making them cheaper.

With affordability top of mind for many, Ford Motor Company is set to launch a new mid-size EV pickup truck that is expected to cost less than $40,000 for Canadians.

The automaker said its new truck will be called the Ford Fathom and will cost just over US$28,000. In Canada, the truck will come with a price tag of $38,690 after a federal EV rebate of $4,000, Ford said on its website.

The Michigan-based carmaker is facing competition from rivals like Elon Musk’s Tesla and China’s BYD. Pre-orders for Fathom will open in early 2027, with customer deliveries beginning in autumn 2027.

The sub-$40,000 pickup truck is expected to be the first of a family of models based on Ford’s new EV platform.

The move comes after Ford abandoned the all-electric version of its F-150 Lightning pickup truck.

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Building a mass-market EV for customers strained by affordability has been in the works at Ford for some time. In 2025, Ford CEO James Farley said during an earnings call that this would be Ford’s new “Model T” moment – a reference to the Ford Model T, which is widely regarded as the first mass-affordable vehicle.

“This is a Model T moment for us at Ford, a chance to bring in a new family of vehicles to the world that offer incredible technology, efficiency, space and features,” Farley said in July last year.

The new line of EVs will be “a very different proposition from the larger, more expensive electric trucks automakers initially brought to market,” Clutch CEO Dan Park said.

The average used truck in Canada costs around $47,000, while a used F-150 Lightning is roughly $65,000, compared with about $44,000 for a used gas-powered F-150, according to data from used-car platform Clutch.

“A new electric pickup around the $40,000 mark would therefore compete much more directly with the trucks consumers are already shopping for,” Park said.

Earlier this year, BYD overtook Tesla as the world’s top seller of EVs. In June, the first batch of Chinese EVs began arriving on Canadian soil, marking another foray of Chinese automakers into the North American market.

Ford is responding to the “broader cost pressure” from Chinese EV makers being able to build cheaper cars, Park said.

“They have demonstrated how lower battery and manufacturing costs can bring EV prices down significantly. That broader cost pressure is pushing established automakers like Ford to rethink vehicle size, battery costs, and manufacturing efficiency,” he said.

— with files from Reuters