Everyone is worried affordability right now, including car manufacturing companies. Especially electric car companies that cost money $55,000 on average.
That makes America’s newest and cheapest electric truck a welcome addition to the market and an odd duck. Officially unveiled last week, the petite, modular offering from upstart Michigan automaker Slate costs just under $25,000 for the base model, and the base model doesn’t offer much. You’ll have to pay more for everything from power windows to speakers.
But beyond being bare-bones, there’s another hidden feature that allows the Slate to command the lowest price: a lithium iron phosphate (LFP) battery. It’s a technology invented in the US but perfected in China. They are cheaper than classic nickel-manganese-cobalt (NMC) batteries.
In a push to produce cheaper electric vehicles, a handful of U.S. manufacturers are following Slate’s path, relying on less popular chemicals. And in a strange way, the American boom in this particular battery chemistry owes to China, as well as President Donald Trump.
Changing lanes
Slate’s website did not initially focus on LFP batteries InsideEVs was reported last week. The reason was uncomplicated: in 2022, Congress passed a sweeping climate bill that created a tax credit of up to $7,500 for buyers of modern electric vehicles. To qualify for the full credit, manufacturers had to utilize batteries that were assembled in the U.S. and ultimately made from materials sourced from the U.S. and its allies. Most importantly, the modern rules discouraged the inclusion of material from Russia, Iran, North Korea and China, known as “foreign entities of concern.”
Manufacturers have focused on affordability by planning to build vehicles with these constraints in mind, including the Slate.
These rules made it challenging to utilize LFP batteries. American scientists discovered the utilize of these materials in batteries already in the 1960s. But more than a decade ago, Western and Asian battery makers shifted their focus to other, more energy-hungry chemicals. However, Chinese producers have decided that they are willing to trade problems with the LFP Chemicals product range for the promise of lower costs and improved stability.
Since then, Chinese electric vehicle giants including BYD and CATL have built a resilient chemistry-based supply chain, producing not only LFP cathodes but also the ability to mine, process and produce everything else that goes into batteries. According to data from Benchmark Mineral Intelligence, a London-based research firm, 97.8 percent of LFP cathode production currently takes place in China. (Almost 85 percent All cathode production also takes place in China.)
American car manufacturers began to show interest in this technology after the first tax break was announced. Ford, for example, said yes cooperates with CATL to produce LFP batteries in the U.S., but the U.S. automaker still had to weigh battery cost and performance against tax credit eligibility.
Then the rules changed and automakers’ calculations became less complicated. Last summer, the GOP-led Congress fulfilled Trump’s longtime campaign promise to “end the electric vehicle mandate” by eliminating the tax credit. This move brought electric vehicles back to the United States. Research firm BloombergNEF predicted earlier this month that U.S. sales would fall 19 percent this year due to policy changes and decisions later made by automakers to reduce production of electric vehicles.
Now automakers have to deal with the confusing and slow Electric vehicle market. But they no longer have to worry about foreign contents in their electric vehicle batteries for fear of losing their tax credit. This opened the door for Slate and other companies to take another look at LFP.