For low-cost, mass-market electric vehicles, lithium-iron-phosphate (LFP) batteries are a clear favorite. They skip pricey materials like nickel and cobalt, offer reasonable energy density, better thermal stability and last far longer.
U.S. automakers want to build them here, but they can’t do it without federal subsidies and China’s help. Now, as those subsidies are under the woodchipper, Ford’s joint battery plant with Chinese battery maker CATL in Michigan is on shaky ground. That could spell trouble for its affordable EV plans.
Welcome to the Friday edition of Critical Materials, your daily round-up of news and events shaping the world of electric cars and technology.
Also on our radar today: Hyundai is considering price hikes across its U.S. model range to soften the blow of tariffs. Plus, Tesla is urging Senate Republicans to avoid abruptly ending the federal clean energy tax credits, which could blow a hole in the company’s profits and manufacturing capabilities.
30%: Ford Distressed Over End Of EV Production Credits
Photo by: Ford
Ford’s EV plans are going off the rails. The automaker planned to build a $3.5 billion LFP battery plant in collaboration with Chinese battery juggernaut CATL by licensing its technology, promising some 2,500 jobs and a boost to Michigan’s economy.
After EV sales started growing at a slower pace than once estimated, Ford scaled back the size of the BlueOval Battery Park in Marshall, Michigan, reducing the investment to around $2.2 billion and the number of jobs to 1,700. It was initially promised around $1 billion in incentives for the plant—that amount was later slashed by half.
The plant also drew political ire for CATL’s alleged ties to the Chinese Communist Party and suspected human rights violations. Now the Trump administration’s “big, beautiful bill” could gut the manufacturing credits, which would have helped Ford build the plant—that’s if the Senate doesn’t make crucial changes to it before it gets passed.
The executive chairman of the automaker, Bill Ford, is ringing the alarm bells over the potential demise of the manufacturing credits. Here’s more from Automotive News:
“We have built the business case on Marshall around that,” the chairman told reporters after a panel discussion at the Mackinac Policy Conference. “My point is politicians can agree or disagree whether those kind of things are desirable, and that’s fine. But don’t change the rules once you’ve already made the investment, because that to me is just a question of fairness, and that’s unfair.”
Bill Ford said he is not sure whether the tax credits for the Marshall plant will ultimately be protected.
“I don’t know the likelihood, but I do know that if it goes away, it puts in peril the plant and the jobs in Michigan,” he said.
It’s hard to overstate how crucial low-cost batteries are to bring the price of EVs down to gas-car levels. High purchase price remains the biggest barrier to mainstream EV adoption and LFP batteries offer a real shot at bringing that down.
In China, 81.5% of installed EV battery capacity now comes from LFP cells. Most new EVs are equipped with LFP batteries in the country. And Chinese battery makers like CATL and BYD have rapidly advanced the tech—what was once seen as a low-energy-density option now consistently delivers longer-range EVs.
For Ford, GM, Hyundai, Tesla and others, government subsidies have been key to scaling up local EV and battery production. The manufacturing credits haven’t just created jobs and boosted local economies, they’ve also helped automakers absorb the upfront costs of electrification and could still soften the blow from tariffs.
If Ford’s Michigan battery plant collapses, it would be a major setback for its plans to deliver affordable EVs that are made in America.
60%: Hyundai May Increase Prices Starting Next Week
Photo by: Tim Levin/InsideEVs
If you’ve been EV-shopping lately, you may have noticed that Hyundai and Kia have extensive hybrid, plug-in hybrid and fully electric options to choose from.
Even though most of their new EVs are now manufactured in the U.S. at Hyundai Motor Group’s plants in Georgia, they still use plenty of parts sourced from overseas. With the Trump administration’s blanket 25% tariffs on imported vehicle parts and foreign-made cars, experts have said that car prices could soon increase.
Now Automotive News has reported that Hyundai is considering a 1% price hike across the board starting next week on newly built models. Vehicles currently in the inventory would remain unaffected, but new models could cost hundreds of dollars more.
Here’s more from that report:
“This period marks our regular annual pricing review, guided by market dynamics and consumer demand, independent of tariffs,” the company said in a statement. “We will continue to adapt to shifts in supply and demand, and regulations, with a flexible pricing strategy and targeted incentive programs.”
The company had previously said prices would hold through June 2, but automakers are now recalibrating—looking for ways to absorb tariff costs without taking a major hit to profits. Some of that cost burden, it seems, will be paid for by American consumers.
90%: Tesla Breaks Silence On The End Of Energy Tax Credits
Photo by: Tesla
Tesla has issued its strongest warning yet against the current administration’s war against clean energy programs. The automaker said ending federal tax credits could deal a major blow to America’s energy independence.
The alarm comes as CEO Elon Musk wraps up his brief but disruptive run as the government’s cost-cutter-in-chief—a move that’s bruised Tesla’s brand and sent its sales and profits into freefall. One outlet phrased it perfectly: the CEO and the company are now on an “image rehab tour.”
Here’s what Tesla Energy posted on X on Thursday:
Abruptly ending the energy tax credits would threaten America’s energy independence and the reliability of our grid – we urge the senate to enact legislation with a sensible wind down of 25D and 48e. This will ensure continued speedy deployment of over 60 GW capacity per year to support AI and domestic manufacturing growth.
It’s an important point. Tesla isn’t just a car company, it’s also a booming energy business. It sells solar panels and stationary energy storage systems. Sections 25D and 48E under the Inflation Reduction Act have been central in making those things more affordable to regular homeowners—25D is the residential clean energy credit that subsidizes installations such as solar panels, whereas 48E supports businesses who build that equipment, such as Tesla.
Everything that promises cleaner air is under the guillotine with this administration, not just EVs.
100%: Should The Senate Preserve Manufacturing Credits?
Photo by: Ford
Amending the bill to preserve the manufacturing credits would alleviate the financial burden of EV and battery manufacturing, not just for Ford, but also for dozens of other brands and companies upstream and downstream in the EV supply chain.
More importantly, it would allow American car companies to finally build LFP battery cells in the U.S. and truly bring the costs down for EVs—even as they explore alternative chemistries to do the same.
Should lawmakers keep the policies steady after companies have already made billion-dollar bets on clean energy? And can the U.S. realistically make affordable EVs without battery tech like LFP and help from Chinese companies? Leave your thoughts in the comments.
Have a tip? Contact the author: suvrat.kothari@insideevs.com
