SANDY, Utah — In a significant announcement this week, the electric vehicle startup Slate unveiled its first model: an affordable electric pickup truck projected to retail for under $20,000 with the federal tax credits for electric vehicles taken into account. The introduction of a low-cost electric truck has the potential to disrupt the market, filling a gap that has persisted for years due to high battery costs and production challenges.
The company plans to commence production of the truck in late 2026, but its success hinges on navigating the complexities that have led to the downfall of many rival startups in the electric vehicle sector. Traditionally, manufacturers of cost-effective electric vehicles have relied on lithium-iron-phosphate (LFP) battery technology, which is known for lower costs. However, Slate is opting for the more expensive nickel-manganese-cobalt (NMC) batteries, a choice driven by supply chain availability and compliance with U.S. regulations.
Slate CEO Chris Barman explained that aligning with current supply chains was crucial. Many LFP materials are sourced from overseas, particularly from China, creating hurdles in meeting U.S. tax credit qualifications. “We’ve selected components that are more prevalent in the U.S. market, ensuring we can comply with battery sourcing requirements,” she said.
The federal tax rebate of $7,500 is a substantial factor in Slate’s pricing strategy, especially since the vehicle comes equipped with basic features, such as manual windows and no audio system, along with a 150-mile range. The company plans to set up manufacturing operations in the Midwest, ensuring compliance with the government’s stipulation that qualifying electric vehicles and their components be sourced from North America.
New regulations established during the Biden administration mandate that a growing percentage of the battery components must be sourced domestically or from allies. By 2029, all qualifying vehicle battery components must be produced in North America, while by 2027, at least 80% of the critical minerals in an electric vehicle battery will need to be recycled domestically or obtained from U.S. Free Trade Agreement countries.
These stringent requirements, implemented to decrease reliance on imported materials, pose significant challenges. Existing manufacturers are scrambling to adapt to the changes, and some have lost their eligibility for federal incentives. However, Slate is positioned to establish its supply chain in alignment with these new rules from the outset.
While the electric vehicle tax credit is a boon for companies like Slate, there is uncertainty about its longevity. Discussions in Washington, including proposals from some legislators to eliminate the subsidy entirely, create additional ambiguity for manufacturers and consumers alike.
Slate has made a significant commitment to its battery supply, securing an initial contract for 20 gigawatt-hours of NMC cells from South Korean manufacturer SK On, which will support the production of approximately 380,000 vehicles equipped with the truck’s standard 52.7-kilowatt-hour battery pack. Slate also plans to offer a larger battery option of 84.3 kilowatt-hours that will provide greater range.
Despite LFP batteries being lauded for their durability and cost-effectiveness, Slate’s choice for NMC technology is driven by its superior energy density. Eric Keipper, the company’s head of engineering, noted that while the truck could achieve a 150-mile range with LFP cells, they would struggle to meet the energy demands of longer-range versions. “The compact design of our truck limits battery space, making energy density crucial for performance,” he said.
In taking this approach, Slate hopes to carve out a significant niche in the electric vehicle market, marrying affordability with compliance and performance to attract consumers eager for an economical electric option. As the industry dynamic shifts and consumer demand for electric vehicles grows, Slate’s strategy may redefine the landscape of affordable electric transportation.