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Americans are in a bit of a pickle. While the rest of the world is still pushing forward with electric vehicles, the U.S. governemnt has done away with one of the biggest driving forces here: the EV tax credit. That means that the tech will soon need to thrive on its own merit—the biggest barrier, of course, being cost.

Car companies are working on this, though. They know that EVs need to be cheaper, especially now that Uncle Sam’s wallet is officially closed. But U.S. automakers may be catching up to the production costs that seasoned Chinese automakers are paying to build comparable cars in North America.

Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: Tesla’s Q3 could be its saving grace for 2025 and a new startup is helping to slash the cost of LFP batteries. Let’s jump in.

30%: Ford Says Its $30,000 EV Pickup Will Match BYD’s Production Costs

Ford CEO Jim Farley just had a huge, chest-thumping moment for America’s EV industry on TV. According to Farley, the automaker’s new Universal EV Platform can match the production costs of BYD’s made-in-Mexico EVs.

This isn’t the first time that Ford has talked up its ability to take on China with new EV underpinnings. In fact, the Universal EV Platform was a direct response to China’s ability to build uber-cheap EVs and sell them around the world, effectively undercutting the global auto market with reckless abandon. And it’s also Ford’s secret weapon in launching its $30,000 electric pickup in 2027.

Here’s the snippet from Farley’s interview with CNBC’s Squawk Box:

We just launched the universal electric vehicle platform in Louisville. We think it’s the same cost as a BYD made in Mexico. We’re trying to out-innovate our competitors like BYD.

I don’t think we can stand still. We can’t rely on a North America or US-only market. Companies like Ford have to out-innovate our Chinese competitors. We’re already facing them in in Australia, New Zealand, in Thailand. They’re subsidized vehicles. It’s happening already.

Farley is essentially declaring war on the auto industry’s boogeyman by targeting the holy grail target of affordability: $30,000. There’s no tax credit helping with that number any longer, either. Washington has officially pulled that plug, but that doesn’t change the needs of the consumer. 

Farley noted that half of all vehicles sold in the U.S. are imports. And even those manufactured domestically have a significant number of imported parts (between 20% and 30% of Ford’s parts are imported, according to the CEO). Meanwhile, vehicles manufactured in China often enjoy $5,000 to $6,000 advantages in labor costs and subsidies, which makes it difficult for American manufacturers to compete—and that’s the reason why Ford needs to innovate.

BYD has managed to dominate the global EV market by using its home-turf government-subsidized advantage to offset labor and parts costs. But as BYD begins to move manufacturing into other countries, its costs rise. And this is where Ford recognizes as a prime place to strike.

“We have to face this,” said Farley. “What Ford is doing about it—we’re not complaining. We’re going to take care of this ourselves.”

60%: Tesla’s Q3 Is Good, But Don’t Call It A Comeback (Yet)

Photo by: Tesla

Tesla’s third-quarter results are in, and like other automakers, it saw a surge of buyers trying to secure tax credits while they could. Tesla sold nearly half a million EVs globally in Q3, a new record.

But before anyone declares this a victory lap, it’s important to know that Tesla’s expected success doesn’t mean it’s out of the woods after a protracted period of dipping sales. Here’s what Reuters reports:

The quarterly tally will help gauge how far U.S. subsidies lifted sales, as China leans on Tesla’s expanded six-seater Model Y L launched in September while Europe slumped after the electric-vehicle maker’s aging lineup struggled to compete and CEO Elon Musk’s politics dampened buyer sentiment.

That has set the stage for weaker third-quarter global deliveries than last year and a potential drop in the December quarter. The expiry of U.S. tax credits likely accelerated purchases that normally would have been made later in the year, rather than attracting new buyers to the brand, analysts said.

Tesla raised car-leasing prices in the U.S., its website showed, after a sweeping legislation passed by Congress ended tax incentives for the EV industry on Tuesday.

Tesla isn’t alone at the edge of the cliff. The whole EV sector is running on the fumes of the federal tax credit for years, and while that’s done a lot of good for EV adoption in recent years, the next few months are set to be particularly rough.

But where Tesla (like other EV-only brands) is uniquely exposed is its inability to pivot to other powertrains to offset any EV-related losses. Legacy automakers like GM and Ford are pivoting to hybrids while other players like Toyota never left them.

That means that Tesla is faced with deciding what to do next. It could weather the storm in hopes that sales will pick back up in the U.S. without the EV tax credit—something it expected after acknowledging that it’s in for “a few rough quarters.” But margins are becoming thinner and competition is heating up, so maybe Tesla could pull an insane move and do something other than build cars in hopes that it will be more profitable.

Meanwhile, Q3 is going to look like a win. Tesla will finally have a good few months on its books, as will most automakers that benefited from the tax credit, but the real test comes in Q4.

90%: This U.S. Startup Says It Can Beat China’s Pricing For EV Batteries

Photo by: CATL

Every single big league automaker on Earth is trying to reduce the costs of its vehicles right now. While today’s driving factor is the EV tax credit, the ultimate underlying reasoning is simple. Cheaper components mean more margin, and more margin means more profits. The hard part is actually figuring out how to squeeze costs down even further on the most expensive component in an EV: the battery.

A new company called Electroflow believes that it has figured out how to do this. Not only does the startup say its tech will lead to batteries 40% cheaper to produce than leading Chinese firms, but it believes it can do that with a U.S.-based supply chain.

TechCrunch’s interview with the company’s co-founder shows what Electroflow has up its sleeve:

“We think LFP is the missing ingredient for energy prosperity. The problem is it’s literally 99% made in China,” Eric McShane, co-founder and CEO of Electroflow, told TechCrunch. “If we want to have a chance of competing, we’ve got to flip that script.”

McShane and his co-founder, Evan Gardner, have developed a technology they think is capable of undercutting Chinese producers on cost by removing several steps in the production process. If they can deliver, they could reduce the cost of an LPF battery by as much as 20% while building a domestic supply chain.

“We looked at the whole process of mining, starting from the rock or the salt water and getting all the way to a lithium chemical. We were like, man, that’s like ten steps,” he said. “That clearly is not the best way to do it.”

The golden standard of lithium refining starts by extracting salty brines from deep underground. The brines are then processed to extricate the lithium contained within, but that process can be lengthy and expensive. Until now, maybe.

China is able to extract and package lithium into the materials needed to build LFP battery packs for around $4,000 per metric ton today. The same amount of that material costs about three times that amount in the U.S. 

Electroflow says that its process reduces processing from ten key steps down to just three. And once its process is in full swing, it will be able to get that cost down to around $2,500 per metric ton—about 40% less than China’s cost today. In the near term, it expects to reach around $5,000 by the end of the year, which doesn’t quite beat out China, but is still a reduction of nearly 60% for domestic production.

TechCrunch explains how Electroflow’s tech works:

The startup’s key technology is a cell that contains anodes that, when run in one direction, absorb lithium ions from brines and then, in another, release them into water containing carbonates. When both passes are finished, the result is lithium carbonate that’s ready to be reacted with phosphate, iron, and other reagents to produce LFP powder that’s ready to be shipped to a battery factory. For manufacturers that want to make something other than LFP, Electroflow can stop the process early and just send them lithium carbonate.

The system runs entirely on electricity, and producing 50 metric tons of lithium carbonate per year would require only as much as one U.S. household, McShane said. The water used in the carbonate step can largely be recycled, too. “We don’t use a ton of electricity. We don’t use a ton of water,” he said.

McShane says that a refining system capable of generating around 100 metric tons of processed powder—around $2,500,000 of LFP material—can fit inside a standard 20-foot shipping container.

The tech is definitely the moonshot that the U.S. EV market needs to build cheaper EVs. Electroflow believes in it, and it completed a proof-of-concept in California earlier this year to demonstrate as much. And if it catches on, it could help drive down the cost of EVs in the coming years, especially as automakers domesticate more of the supply chain.

100%: Are Hybrids In For A Few Good Years Ahead?

Photo by: Ralph Hermens

While automakers prepare for EVs to have another resurgence, many are going all-in on hybrids to bridge the gap. In fact, Americans were more interested in hybrids than ever at the start of 2025, a trend that many manufacturers are banking on being a way to still utilize their investment into domestic battery manufacturing despite an anticipated slowdown in EV sales.

Do you believe that hybrid sales will eat up the market share that the tax credit was responsible for, or will folks go back to gas? Let me know your thoughts in the comments.