How Trump Helped China Build America’s Cheapest EV

Everyone is worried affordability right now, including companies that make cars. Especially the companies that make it electric vehicleswhich the price about $55,000.

That makes America’s newest and cheapest electric car a welcome addition to the market, and an odd duck. It was officially revealed last week, a small, cut-out version Michigan-based automaking upstart Slate it costs less than $25,000 for its base model, and the base model doesn’t get you much. You have to pay more for everything, from power windows to speakers.

But beyond being bare bones, there’s another hidden element that allows the Slate to reach such a low price: the lithium iron phosphate (LFP) battery. It’s a technology made in the US but made in China. They are cheaper than nickel manganese cobalt (NMC) batteries.

In order to make affordable EVs, a few manufacturers from the US are on the Slate route, leaning towards the more popular chemistry. And surprisingly, the US boomlet in This battery chemistry China should be grateful and so should President Donald Trump.

Change Process

Slate was not looking at LFP batteries, page InsideEVs reported last week. The reason was simple: In 2022, Congress passed a rules sweep the weather which created a tax credit of up to $7,500 for new EV buyers. To qualify for the full credit, manufacturers had to use batteries that were assembled in the US, and, finally, they used materials from the US and its allies. In short, the new rules banned the inclusion of products from Russia, Iran, North Korea, and China, which are called “foreign organizations of concern.”

Manufacturers focus on the ability to make cars with these restrictions in mind, including Slate.

These regulations made it difficult to use LFP batteries. US scientists discovered the batteries for these devices back in the 1960s. But more than a decade ago, Western and Asian battery manufacturers shifted their focus to other, more energy-intensive industries. Chinese manufacturers, however, decided to accept the exchange of LFP chemistry because of its promise of cost reduction and stability.

Since then, China’s EV giants including BYD and CATL share price they’ve developed an electrical engineering system that revolves around chemistry, not just LFP cathodes, but the ability to mine, process, and manufacture everything else that goes into batteries. Today, 97.8 percent of LFP’s cathode production takes place in China, according to figures from Benchmark Mineral Intelligence, a London-based research firm. (About 85 percent of everything cathode manufacturing is done in China, too.)

US automakers began showing interest in the technology even after the tax credit was first announced. Ford, for example, said it would and CATL to manufacture LFP batteries in the US, but the American automaker still had to weigh the cost and performance of the batteries against their eligibility for tax credits.

Then the laws changed, and the number of machine manufacturers began to decline. Last summer, the GOP-led Congress he fulfilled an old Trump campaign promise to “eliminate electric vehicle liability” by killing the tax credit. This move made EVs return to the US. Research firm BloombergNEF predicted earlier this month that U.S. sales will drop 19 percent this year due to policy changes, and automakers’ subsequent decisions to reduce their EV output.

Now automakers must deal with a to interfere and lazy EV market. But they no longer have to worry about what’s on the outside of their EV batteries for fear of losing their tax credit. This opened the door for Slate and other companies to give LFP another look.