How Trump Helped China Make America’s Cheapest EV
Slate is the latest automaker to transition to lower-cost batteries perfected in China, driven in part by the repeal of EV tax credits that required materials to be sourced domestically.
Slate is the latest automaker to transition to lower-cost batteries perfected in China, driven in part by the repeal of EV tax credits that required m
Read Full Story at Wired →Why This Matters
The shift in U.S. automakers toward Chinese-made batteries reveals a paradox in American industrial policy: policies designed to bolster domestic supply chains are inadvertently accelerating reliance on foreign innovation. The repeal of EV tax credits tied to domestic sourcing has made cost-competitive alternatives from China irresistible, raising questions about the long-term viability of protectionist measures in a globalized market.
Background Context
For years, U.S. automakers lagged in battery innovation, while Chinese firms invested heavily in cheaper, high-performance lithium iron phosphate (LFP) batteries. The Trump administration’s 2019 tariffs on Chinese imports and subsequent domestic investment incentives aimed to revive American manufacturing, but the Inflation Reduction Act’s stricter sourcing rules created a compliance gap that Chinese suppliers now fill by default.
What Happens Next
As more automakers adopt Chinese battery tech, the U.S. risks ceding control over a critical supply chain to strategic rivals. Congress may revisit tax credit rules, but the genie is out of the bottle—once price competition becomes entrenched, reversing course without economic pain will be difficult. Meanwhile, domestic battery startups face a shrinking window to scale up before market share erodes.
Bigger Picture
This episode underscores a recurring pattern: industrial policy often outpaces industrial reality. The global battery arms race has exposed the limits of nationalist economic strategies, forcing policymakers to confront whether protectionism can outlast technological and cost disparities. The outcome could redefine not just EVs, but America’s broader industrial resilience in the 21st century.
