We study the effect of a terahertz field-driven single cavity mode for ultrafast control of a fermion chain with dissipation-induced nonlinearity and quadratic coupling to an infrared-active phonon mode. Without photon loss from the cavity, we uncover a first-order phase transition in the nonequilibrium steady state only for the lower phonon-polariton, accompanied by polaritons whose frequency response is asymmetric with respect to the photon frequency due to the direct laser-induced dressing effect on the photon. A weak laser field fails to induce the phase transition but renders the polaritons symmetrical. Finally, we show that sufficiently strong photon loss from the cavity eliminates the polaritons and the associated phase transition. The experimental feasibility of these phenomena is also proposed.

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