US President Donald Trump has spent the first six months of his second term in office attempting to make electric cars not happen, but signs of life keep emerging. In the latest news, the Ultium Cells EV battery branch of General Motors has just announced plans to launch its low-cost LFP EV battery into the market by late 2027.
Tax Credits Or Not, Here Come The Affordable Electric Vehicles Of The Future
LFP stands for Lithium Iron Phosphate, a less expensive version of the conventional lithium-ion batteries commonly used in electric vehicles. LFP batteries have been late to the party because the initial iterations underperformed compared to their lithium-ion counterparts. However, the kinks have been ironed out in recent years, with both performance and cost factoring into the affordability equation (here and here are some recent developments).
Ultium Cells sprang into life in 2019, when GM hooked up with the well known firm LG Energy Solution. Although GM dropped the “Ultium” branding in 2023, the company’s EV battery journey continued taking shape on through 2024, including steps needed to nail down a lithium supply chain (see more Ultium battery background here).
Despite the anti-EV fervor gripping elected officials in Congress as well as the White House, the journey continues. Earlier today, Ultium Cells announced a new makeover for its existing battery cell factory in Spring Hill, Tennessee, aimed at scaling up LFP battery production for electric vehicles.
“Conversion of battery cell lines at Spring Hill to produce LFP cells will begin later this year, with commercial production expected by late 2027,” Ultium explained in a press statement.
Kurt Kelty, the former longtime Tesla battery chief hired by GM last year, also chipped in his two cents. “At GM, we’re innovating battery technology to deliver the best mix of range, performance, and affordability to our EV customers,” said Kelty, who holds down the position of VP of batteries, propulsion, and sustainability at GM.
Who’s Afraid Of The Big, Beautiful Bill?
“This upgrade at Spring Hill will enable us to scale production of lower-cost LFP cell technologies in the U.S., complementing our high-nickel and future lithium manganese rich solutions and further diversifying our growing EV portfolio,” Kelty affirmed indicating that GM is forging ahead with its electric vehicle lineup even though tax credits for new and used EVs will soon expire under the new tax bill (the so-called “Big, Beautiful Bill”).
Wonjoon Suh, executive VP and head of the Advanced Automotive Battery division at LG Energy Solution, also affirmed the company’s intent to satisfy the demands of electric vehicle buyers in the US. “We will bring our extensive experience and expertise in U.S. manufacturing to the joint venture facility, further accelerating our efforts to deliver new chemistries and form factors that effectively capture the unmet needs in the EV market,” Suh stated, with “unmet needs” apparently referring to drivers who seek affordability over battery range.
“With LFP battery technology, GM is targeting significant battery pack cost savings compared to today’s high-nickel battery pack while increasing consumer EV choice,” Ultium emphasized.
This Is Why Electric Vehicles Are Here To Stay
Of course, loss of the tax credit is going take some steam out of the electric vehicle movement here in the US. Or, will it? As pointed out by CleanTechnica editor Zachary Shahan, the new tax bill will most likely spark a short term surge in demand for EVs, which could help stimulate the demand for a more favorable tax policy in the near future.
That remains to be seen. However, loss of the tax credit may not be the deal-breaker that anti-EV lawmakers are hoping for. From the beginning, the up-front cost of owning an electric vehicle was a bridge too far for households on a budget, leaving the field to higher-income households. All else being equal, those upper-echelon households don’t necessarily need a tax break to keep buying electric vehicles. They just need a good reason to make the switch to electric mobility.
If you’re thinking that a spike in the cost of gasoline is an effective motivator, that’s one key factor. Despite the higher up-front cost, the total cost of ownership (TCO) for electric vehicles is already competitive with gasmobiles, partly due to the cost of gasoline.
Another important consideration is the unlocking of new markets in the higher income brackets. As recently reported by Electrical Contractor Magazine, new home builders are installing EV-supporting wiring hand over fist. New home buyers that may have been locked out of EV charging in their former situation can now walk into a more seamless environment for electric vehicles.
Millions of renters and owners in multi-household buildings are also among those currently locked out of the opportunity to charge up at home. If even a small fraction of them had access to EV charging on the premises, that would make have a huge impact on the pace of electric vehicle sales, as surveys consistently show that the overwhelming majority of EV owners prefer to charge up at home.
Innovative startups are beginning to uncork that bottleneck with new charging-as-a-service options that enable property-owning entities to obtain on-site EV chargers without up-front costs. The installer takes on all the headaches including ongoing operation and maintenance chores.
Electric Vehicles Are Coming For Your Fleet
The fleet electrification movement is another pressure point that can contribute momentum to the EV sales picture in the US. In one particularly interesting development in that area, Siemens has begun marketing a new accounting service that enables fleet managers to accurately reimburse employees who recharge their company cars at home, even if other electric vehicles use the same charger.
In April, the analytics firm Trellis Group took stock of the impact of both tariffs and tax laws on the fleet electrification situation in the US. “Even amid today’s uncertain landscape — from shifting tariffs to evolving U.S. policy — many companies remain committed to their goals for electric vehicle adoption,” Trellis stated.
“Despite higher acquisition costs, fleet owners are more satisfied with EVS than with internal combustion vehicles, according to the survey,” Trellis added, citing a Cox Automotive survey. “They deliver lower costs over the lifetime of a vehicle, higher efficiency and cleaner operations.”
What do you think, is there enough momentum in to overcome the obstacles set forth in the new tax bill, along with the “TACO” Trump tariffs, and anything else the anti-EV movement can throw into the pot?
Image (cropped): Cadillac LYRIQ electric vehicle courtesy of Cadillac.
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