How did Trump help China manufacture the cheapest electric car in America?

Everyone is worried about Affordability right now, including companies that make cars. Especially companies that manufacture Electric carswhich costs With 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, it’s the modular little offering from Michigan-based auto startup Slate It costs just under $25,000 for its base model, and the base model doesn’t save you much. You’ll have to pay more for everything from power windows to speakers.

But besides being barebones, there’s another hidden feature that allows the Slate to reach a very low price: a lithium iron phosphate (LFP) battery pack. It is a technology that was invented in the United States but improved in China. They are cheaper than traditional nickel manganese cobalt (NMC) batteries.

In their quest to produce low-cost electric vehicles, a group of US manufacturers are going the Slate route, leaning toward less popular chemistry. In a strange way, the United States got in there This is battery chemistry itself And you should thank China, as well as President Donald Trump.

Change lanes

Slate did not initially focus on LFP batteries InsideEVs noticed last week. The reason was simple: In 2022, Congress passed A Comprehensive climate law Which created a tax credit of up to $7,500 for buyers of new electric vehicles. To qualify for full certification, manufacturers had to use batteries assembled in the United States and, ultimately, manufactured using materials from the United States and its allies. Importantly, the new rules discouraged the inclusion of material from Russia, Iran, North Korea and China, all of which are termed “Foreign Entities of Concern.”

Manufacturers focused on affordability and planned to build vehicles with these constraints in mind, including the Slate.

These rules made it difficult to use LFP batteries. American scientists have discovered battery applications for these materials Back in the 1960s. But more than a decade ago, battery makers in the West and Asia shifted their focus to other, more energy-dense chemistries. Despite this, Chinese manufacturers have decided that they are willing to trade the chemistry’s LFP range issues for the promise of reduced costs and improved stability.

Since then, including Chinese electric car giants BYD and Cattle It has built a strong supply chain around chemistry, producing not only LFP cathodes but also the ability to extract, process and manufacture everything else that goes into batteries. Today, 97.8 percent of LFP cathode production is produced in China, according to figures from Benchmark Mineral Intelligence, a research firm in London. (Approximately 85 percent of everyone Cathode production occurs in China as well.)

American automakers began showing interest in this technology even after the tax break was first announced. Ford, for example, said he would do so Partner with CATL To manufacture LFP batteries in the United States, but the American automaker still must weigh the cost and performance of the batteries with their eligibility for the tax credit.

Then the rules changed, and the automakers’ calculations became less complicated. Last summer, the GOP-led Congress She fulfilled a long-standing Trump campaign promise To “end the electric vehicle mandate” by killing 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 decline by 19 percent this year due to the policy change, and subsequent decisions made by automakers to reduce electric vehicle production.

Now automakers have to deal with a confusing and Slow Electric vehicle market. But they no longer have to worry about the foreign content of their electric car batteries for fear of losing the tax break. This opened the door for Slate and other companies to give LFPs another look.