LoaderSave StorySave this storyCommentLoaderSave StorySave this storyEveryone’s worried about affordability right now, including the companies that make cars. Especially the companies that make electric cars, which cost an average of $55,000.
That makes America’s newest and cheapest electric truck a welcome addition to the market—and an odd duck. Officially unveiled last week, the small, modular offering from Michigan-based automaking upstart Slate costs just below $25,000 for its base model, and the base model doesn’t get you much. You’ll have to pay more for everything, from powered windows to speakers.
But beyond being bare bones, there’s another hidden quirk that allows Slate to reach a rock-bottom price: a lithium iron phosphate (LFP) battery pack. It’s a technology invented in the US but perfected in China. They’re cheaper than traditional nickel manganese cobalt (NMC) batteries.
In a quest to make lower-cost EVs, a handful of US-based manufacturers are on Slate’s path, leaning into the less popular chemistry. And in a weird way, the US boomlet in this particular battery chemistry has China to thank—and also President Donald Trump.
Slate wasn’t initially focused on LFP batteries, the website InsideEVs noted last week. The reason was simple: In 2022, Congress passed a sweeping climate law that created a tax credit of up to $7,500 for buyers of new EVs. To qualify for the full credit, manufacturers had to use batteries assembled in the US, and, eventually, made using materials from the US and its allies. Critically, the new rules discouraged the inclusion of materials from Russia, Iran, North Korea, and China, all dubbed “foreign entities of concern.”
Manufacturers focused on affordability planned to build vehicles with those restrictions in mind, including Slate.
Those rules made it problematic to use LFP batteries. US scientists discovered the materials’ battery applications back in the 1960s. But more than a decade ago, Western and Asian battery-makers shifted their focus to other, more energy-dense chemistries. Chinese manufacturers, though, decided they were willing to exchange LFP chemistry’s range issues for its promise to lower costs and improve stability.
Since then, Chinese EV giants including BYD and CATL have built up a robust supply chain around the chemistry, producing not only LFP cathodes, but also the capacity to mine, process, and manufacture everything else that goes into the batteries. Today, 97.8 percent of LFP cathode production takes place in China, according to figures from Benchmark Mineral Intelligence, a London research firm. (Nearly 85 percent of all cathode production happens in China, too.)
US automakers began to show interest in the technology even after the tax credit was first announced. Ford, for example, said it would partner with CATL to manufacture LFP batteries in the US, but the American automaker still had to weigh the cost and performance of the batteries with their tax-credit eligibility.
Then the rules changed, and automakers’ calculus got less complicated. Last summer, the GOP-led Congress fulfilled a long-standing Trump campaign promise to “end the electric vehicle mandate” by killing the tax credit. The move set EVs back in the US. Research firm BloombergNEF predicted earlier this month that US sales will fall by 19 percent this year because of the policy change, and the decisions automakers afterwards made to reduce their EV output.
Now automakers have to deal with a confusing and sluggish EV market. But they no longer have to worry about the foreign content of their EV batteries for fear of losing the tax credit. That opened the door for Slate and other companies to give LFPs another look.
The industry’s pivot to more affordable batteries "is partly due to market forces and what consumers are requesting, as well as some of the regulatory and policy changes with the Trump administration,” says Bob Lee, the president of LG Energy Solution in North America, which operates eight manufacturing plants across the continent.
After reviewing its options, Slate is planning to use batteries made by Gotion, a US-based subsidiary of a Chinese firm. The batteries will be manufactured in Illinois. (Even though they’ll be assembled in the US, the batteries wouldn’t have met the threshold for the repealed tax credit.) The company says its truck has a range of 205 miles per charge, up from the originally promised 150 miles. “The battery pack for a Slate Truck had to meet targets for durability, reliability, and affordability—among other metrics,” Jeff Jablansky, a company spokesman, wrote WIRED.
Other automakers have turned to LFP batteries, especially for more affordable trims. Some standard 250-mile-range Tesla Models 3 and Y use the batteries, as do standard-range Mustang Mach-Es, which get 250 miles of range. The updated Chevrolet Bolt will use LFPs for the rest of its run (260 miles), and GM said last August it would temporarily import those batteries from China rather than manufacture them in the US, as the company worked to get domestic production lines in order. Ford’s small electric truck produced by its “skunkworks” team in California—a direct competitor with Slate’s vehicle—will use LFPs too.
Some LFP production is underway in the US, though it is still dwarfed by China’s domination of the chemistry supply chain. Five of the Korean firm LG Energy Solutions’ (LGES) eight North American manufacturing facilities are or will soon be building LFPs. It expects to produce 50 gigawatt-hours of LFP capacity this year, more than tripling last year’s output.
For now though, most of LGES’s LFP batteries—as well as those produced by other US-based manufacturers—won’t end up in EVs. They’ll instead be used for energy storage systems. LFPs are arguably a better fit for stationary storage than they are for cars because they’re stable, safe, and long-lasting, plus their heavier weight doesn’t matter as much. In the past half-year alone, LGES, GM, Ford, and Samsung have all said that they’re converting LFP battery production lines meant for EVs to instead churn out energy storage, allowing them to maintain some cash flow even as EV sales dip.
GM has said that it will apply LFP chemistry to energy storage systems while exploring other chemistries for EVs. “GM’s battery strategy is focused on lowering cost, improving performance, and building a more local, more resilient supply chain—while advancing the right battery for the right application across EVs and energy storage,” spokesman Shane Levy says.
In the long term, this toehold for domestic LFP production may lower dependence on China. But Lee says the US has plenty of work to do in order for LFPs—let alone other chemistries—to take hold in the way once envisioned by the 2022 law. That includes manufacturers committing billions more to build out new facilities and developing talented and skilled local workforces with the manufacturing know-how.
“Sometimes even simple metal parts, stamping parts—you don't have all the manufacturing where we are, so we have to import these things,” he says.
The most important element to ensure US manufacturers thrive may not be a return of tax credits, but certainty that things won’t change wildly from administration to administration. “Even if you have policies that are not so friendly, if it's set and if it's somehow going to be stable, then you can still invest your way around it and plan,” he says. “Right now, that's difficult to do.”
That means that even though you can’t buy a Chinese EV in the US, a growing number of electron-powered cars on the road will have Chinese technology under the hood.
