Slate, a new electric vehicle startup, has revealed its first model: an utilitarian electric pickup truck expected to cost under $20,000 after the federal tax credit. Despite the cost advantages of lithium-iron-phosphate (LFP) batteries, Slate has chosen to use nickel-manganese-cobalt (NMC) batteries in its vehicle. According to Chris Barman, Slate’s CEO, this decision was driven by the need to comply with the battery-sourcing requirements for the $7,500 federal EV rebate.
The Challenge of LFP Batteries
LFP batteries, while cheaper and gaining popularity worldwide, posed a challenge for Slate in terms of supply chain compliance. Most LFP materials come from China, which is considered a ‘foreign entity of concern’ under the EV tax credit rules. These rules require that battery components and critical minerals come from North America or countries with U.S. free-trade agreements.
Compliance with EV Tax Credit Rules
The EV tax credit rules, implemented during the Biden administration, aim to boost domestic EV and battery manufacturing while reducing reliance on China. By 2029, 100% of a qualifying vehicle’s battery components must be made in North America. By 2027, 80% of an EV battery’s critical minerals must be recycled in North America or sourced from the U.S. or its free-trade partners.
Key Factors in Slate’s Decision
- Supply Chain Compliance: NMC batteries have a more compliant supply chain as they are more commonly produced in the U.S.
- Energy Density: NMC batteries offer superior energy density compared to LFP, which is crucial for Slate’s longer-range vehicle version.
- Availability: NMC cells are more readily available from U.S.-based manufacturers like SK On, with whom Slate has signed an initial deal for 20 gigawatt-hours of battery cells through 2031.
Implications of the Decision
Slate’s choice of NMC batteries positions the company well under current EV tax credit rules. However, the political landscape surrounding these incentives is uncertain, with proposals to eliminate the subsidy having been made. Despite these uncertainties, Slate’s decision reflects a strategic approach to navigating the complex regulatory environment surrounding EV manufacturing.
The Slate truck’s specifications include a base version with a 150-mile range and crank windows, highlighting the company’s focus on affordability. The decision to use NMC batteries was ultimately driven by the need to balance cost, performance, and regulatory compliance. As the EV market continues to evolve, manufacturers like Slate must carefully navigate the technical and regulatory challenges associated with battery technology.
