Michigan startup Slate unveiled an affordable electric truck leveraging lithium iron phosphate (LFP) battery technology perfected in China. This shift was influenced by the repeal of US EV tax credits that previously restricted foreign battery materials.
- Slate uses Chinese-developed LFP batteries to cut costs under $25K.
- Repeal of US EV tax credit removed domestic sourcing restrictions.
- LFP battery supply chain remains dominated by Chinese manufacturers.
What happened
Slate, a Michigan-based EV startup, released an electric truck priced just below $25,000, making it America’s cheapest electric truck to date. The vehicle uses a lithium iron phosphate (LFP) battery technology that was invented in the US decades ago but has been perfected and industrialized primarily by Chinese manufacturers over the past decade. LFP batteries offer a more affordable and stable alternative to more energy-dense nickel manganese cobalt chemistries which have dominated Western EV markets.
Originally, US manufacturers like Slate hesitated to use LFP cells because federal tax credit incentives required batteries to be assembled in the US and made with materials from allied countries, explicitly excluding China. However, the 2022 climate law’s tax credits were repealed by a GOP-led Congress in 2025 under President Trump’s administration, ending the domestic sourcing requirements and allowing Slate and others to revisit LFP technology. Slate will source batteries made by Gotion, a Chinese-owned company assembling cells in Illinois, which would not have qualified for the repealed credits but enables cost savings and competitive pricing.
Why it matters
The shift to LFP batteries signals a notable change in the US EV manufacturing landscape. Automakers seeking to produce lower-cost vehicles without penalty from complex tax credit rules are now able to tap into Chinese-developed supply chains and cost structures. While previously discouraged, the economic realities and absence of tax incentives have made LFP a pragmatic choice for affordable EV production in the US market.
This change underscores China’s continuing dominance in global EV supply chains, especially in battery materials and manufacturing. Despite US innovation in battery chemistry decades ago, China’s investment in mining, processing, and mass production of LFP cathodes and cells now underpins projects like Slate’s. It highlights the challenges US automakers face in balancing domestic manufacturing ambitions with affordability and competitive market positioning.
What to watch next
The US EV market’s trajectory will depend on how manufacturers evolve following the removal of tax credits and corresponding sourcing restrictions. If more companies adopt LFP batteries, we may see a wave of more affordable EVs entering the market, but at the risk of increased dependence on Chinese supply chains. Industry players like Ford and LG Energy Solution are already exploring domestic LFP production partnerships, signaling efforts to bring some manufacturing back to North America while leveraging Chinese-developed technology.
Consumer adoption and sales will also be critical to watch. BloombergNEF forecasts a 19% decline in US EV sales this year due partly to policy uncertainty, but the emergence of lower-priced EV models like Slate’s could help mitigate that decline by appealing to price-sensitive buyers. Additionally, policymakers may revisit incentives or regulatory approaches to balance between fostering domestic manufacturing and encouraging EV affordability.