Post by Nicholas Littlejohn

Initially, the startup planned to use nickel-manganese-cobalt (NMC) cells. The chemistry is widely used in the automotive industry and favored for its energy density, which translates into longer range. But NMC is also expensive, mostly due to high nickel and cobalt prices. More recently, automakers have begun to use another chemistry, lithium-iron-phosphate (LFP). Battery packs that use LFP are less energy dense but cheaper by about 40%, thanks in part to lower-cost ingredients like iron, one of the main cathode materials, which replaces nickel and cobalt. There were good reasons why Slate Auto, and other automakers, started with NMC. The LFP supply chain today is concentrated in China. That wasn’t always the case — early U.S. battery startup A123 Systems was founded to commercialize the technology. But after a few missteps, it fell into bankruptcy and was bought in 2013 by a Chinese auto parts company. Since then, Chinese battery companies have embraced the chemistry and dominated production of LFP cells. LFP’s foreign origin meant that, before last summer, EVs that used it wouldn’t qualify for a $7,500 tax credit under the Inflation Reduction Act. Only batteries made of materials sourced domestically or from companies with which the U.S. had a free trade agreement would qualify. But when the One Big Beautiful Bill Act axed the tax credits, those concerns evaporated, as well. Chinese manufacturers were back in consideration. Slate said it is working with Hefei-based battery company Gotion Inc. to source the cells, which will be built at a factory in Illinois.