Slice potatoes into thin 1/8-inch rounds—uniformity is key for even cooking. While you slice, combine heavy cream, salt, garlic powder, onion powder, and black pepper in a bowl and whisk together until well blended. I like to taste the cream mixture at this point and adjust seasoning if needed, since you won't be able to fix it once the potatoes are cooked.

Lightly coat a baking pan or small baking dish (about 7x5 inches or similar) with oil spray. Layer the sliced potatoes evenly in the pan, lightly spraying between layers to encourage browning and prevent sticking. Place the pan in the air fryer basket and cook at 360°F for 18 minutes. This initial stage starts breaking down the potatoes and begins rendering out their starches.

Carefully remove the hot pan from the air fryer and pour the cream mixture from Step 1 over the partially cooked potatoes. Press down gently with a spatula to submerge the potatoes as much as possible—this helps them cook evenly and absorb the cream. Return the pan to the air fryer and cook at 300°F for 15-18 minutes until the potatoes are very tender when pierced with a fork.

Remove the pan from the air fryer and sprinkle the shredded cheddar cheese evenly over the top. I like to use freshly shredded cheese rather than pre-shredded, as it melts more smoothly and creates a better texture. Return to the air fryer and cook at 300°F for 1-2 minutes just until the cheese is melted and beginning to lightly brown.

Remove from the air fryer and let rest for 10 minutes before serving. This cooling time allows the scalloped potatoes to set slightly so they hold together better when serving, and it also gives the cream sauce time to thicken as it cools.