The Cheapest EV with Chinese-Made LFP Battery: Slate Makes It Happen

The U.S.-based startup automaker Slate has announced a compact electric truck with a base price of around $25,000. This makes it one of the most affordable electric vehicles (EVs) in the U.S. market. According to Wired, Slate achieved this low price by adopting lithium iron phosphate (LFP) batteries, whose production technology has been perfected in China. Ironically, a policy change during the Trump administration, which eliminated certain EV tax credits, indirectly encouraged reliance on Chinese-made batteries.

The Key to Affordability: LFP

The average selling price of EVs in the U.S. is about $55,000. Slate’s new model costs less than half of that. Naturally, the base model is highly basic, with many features such as power windows and speakers offered as paid options.

The primary factor enabling this remarkably low price is the use of LFP battery packs. Compared to nickel-manganese-cobalt (NMC) batteries, LFP batteries have a lower energy density but do not require expensive rare metals like cobalt, significantly reducing material costs.

The fundamental principles of LFP technology were discovered by U.S. researchers in the 1960s. However, Western battery manufacturers focused on developing NMC batteries with higher energy densities. Meanwhile, Chinese manufacturers emphasized LFP’s stability and low cost, creating a large-scale production system.

According to data from the London-based research firm Benchmark Mineral Intelligence, 97.8% of global LFP cathode production now takes place in China. This means that any company looking to use LFP batteries is, in effect, reliant on China’s supply chain.

The Policy Paradox

Initially, Slate chose not to use LFP batteries due to the climate legislation enacted in 2022, known as the Inflation Reduction Act (IRA). This law introduced an EV purchase tax credit of up to $7,500, contingent on batteries being assembled domestically and certain raw materials being sourced from the U.S. or allied nations. Countries like China, Russia, Iran, and North Korea were designated as “foreign entities of concern,” effectively excluding them from the supply chain.

Under these conditions, using China-dependent LFP batteries risked disqualifying the vehicles from receiving tax credits. This prompted companies like Ford to partner with CATL to manufacture LFP batteries domestically.

However, the situation changed drastically when the Trump administration rescinded these tax credit requirements. This allowed Slate to adopt LFP batteries supplied from China without restrictions. Ironically, this deregulation under the Trump administration accelerated U.S. dependence on Chinese battery technology.

U.S. Manufacturers Shift to LFP

Slate’s move is not unique. Several U.S. automakers aiming to produce affordable EVs are transitioning to LFP batteries. Ford is advancing plans to build a domestic factory in partnership with CATL, while Tesla has already adopted Chinese-made LFP batteries in some of its models.

Although LFP batteries have lower energy density compared to NMC batteries, which limits their range, they are a viable option for urban short-distance travel and cost-conscious consumers. While Slate’s base model sacrifices range, it offers a new choice in the EV market at a $25,000 price point.

China’s Battery Dominance

The current state of LFP batteries underscores China’s manufacturing prowess. Chinese companies have established a vertically integrated supply chain that spans material extraction from mines, processing, and final assembly. Major Chinese EV players like BYD and CATL are rapidly increasing their global presence using this technology.

U.S. government policies are now caught between protecting domestic industries and promoting affordable EV adoption. While the tax credit rollback under the Trump administration has spurred the introduction of low-cost EVs, it has also deepened dependence on China in the long run.

Editorial Opinion

In the short term, Slate’s $25,000 EV is likely to ignite a price war in the U.S. market. Existing automakers will be compelled to accelerate the adoption of LFP batteries, further increasing dependence on Chinese-made components. Over the next three to six months, more low-cost EV models are expected to follow a similar strategy.

From a long-term perspective, this trend poses serious challenges to the U.S. battery supply chain strategy. The IRA’s intent to promote domestic production has been undermined by policy inconsistencies. Over the next one to three years, the U.S.’s ability to establish a competitive edge in alternative technologies, such as sodium-ion batteries, will be a key determinant of its industrial competitiveness.

The editorial board believes that balancing policy consistency with industry protection is a critical issue. As the U.S. weighs the benefits of affordable EVs against the risks of dependence on China, the Slate case vividly illustrates the trade-offs between short-term market gains and long-term industrial security.

References

• How Trump Helped China Make America’s Cheapest EV | Wired — Published on 2026-07-02