Trump's EV Tax Credit Repeal Boosts Chinese LFP Battery Use in US
Original: How Trump Helped China Make America’s Cheapest EV
Why This Matters
Policy shifts are directly accelerating Chinese battery technology adoption across the US EV supply chain.
Michigan startup Slate launched America's cheapest EV at under $25,000, powered by a lithium iron phosphate (LFP) battery with a supply chain rooted in China. The repeal of EV tax credits that required domestic sourcing removed a key barrier to adopting Chinese battery technology in the US market.
Slate, a Michigan-based EV startup, officially unveiled a small modular electric truck priced just below $25,000 — the cheapest EV currently on the US market. The vehicle's low cost is enabled by a lithium iron phosphate (LFP) battery pack, a chemistry originally discovered by US scientists in the 1960s but largely perfected and commercialized by Chinese manufacturers such as BYD and CATL. Today, 97.8% of global LFP cathode production takes place in China, according to Benchmark Mineral Intelligence.
Slate was not initially planning to use LFP batteries. The 2022 Inflation Reduction Act created up to $7,500 in EV tax credits, but required batteries to be assembled in the US and eventually sourced from the US or allied nations. Materials from 'foreign entities of concern' — including China — were disqualifying, making LFP batteries a problematic choice.
That calculus changed when the Republican-led Congress repealed the EV tax credit as part of Trump's campaign promise to 'end the electric vehicle mandate.' With no domestic sourcing requirements attached to any subsidy, automakers including Slate were freed to adopt LFP chemistry without penalty. Ford had previously weighed a CATL partnership for LFP production in the US under the old rules; the repeal simplified such decisions across the industry.