1. What is lithium iron phosphate battery
Lithium iron phosphate battery refers to a lithium ion battery that uses lithium iron phosphate (LiFePO4) as the cathode material and carbon as the anode material. LiFePO4 battery does not contain nickel and cobalt, the supply of raw materials is more stable, and it has a stronger cost advantage than ternary lithium batteries.
Due to the advantages of long cycle life, good safety performance, strong stability, and low cost, in recent years, LiFePO4 batteries have been favored by the market, especially car companies. Tesla, BYD, Volkswagen, Tesla, Ford, Toyota and many other car companies have made it clear that they have introduced or are considering introducing lithium iron phosphate batteries in new models.
It is predicted that LiFePO4 batteries will reach 36% in terms of the share of batteries used in pure electric vehicles in 2025. However, compared with ternary batteries, lithium iron phosphate batteries are slightly inferior in terms of cruising range, energy density, and low temperature resistance.
2. Chinese companies focus on lithium iron phosphate batteries
From a global perspective, China's LiFePO4 battery technology is leading. China has greatly promoted the development of battery technology. In the past decade, Chinese companies have vigorously promoted LiFePO4 batteries instead of nickel-cobalt-manganese ternary batteries more popular in the West.
When European and American companies abandoned lithium iron phosphate technology, some Chinese battery companies have spent ten years continuously researching it, continuously improving the energy density of batteries and systems, making it the mainstream technology route for low-end and mid-range models.
Compared with other countries, China's LiFePO4 battery technology has continuously achieved breakthroughs after long-term development and has more advantages. In the past two years, China's LiFePO4 battery technology has made great innovations. For example, BYD launched the blade battery, which not only maintains the safety advantages of lithium iron phosphate materials, but also makes up for the shortcomings in energy density through CTP technology. It is a product with comprehensive performance.
In addition, currently, globally, lithium iron phosphate production capacity is mainly concentrated in China. With the continuous increase in demand in overseas markets in the past two years, China's lithium iron phosphate products are gradually being deployed through export and local factory construction. It is a good opportunity for China's lithium iron phosphate battery products and materials to be supplied overseas.
Companies can take advantage of China's lithium iron phosphate industry to bind global customers. Even if they turn to the ternary route in the future, this supply channel will help further expand the global market. According to relevant data, China dominates the production of LiFePO4 batteries and will account for 99.5% of the global supply this year. It is estimated that by 2030, China's LiFePO4 battery production capacity will account for 97% of the global planned production capacity.
3. Global companies accelerate the layout of LiFePO4 batteries
LiFePO4 batteries are not only favored in China, but also more and more popular abroad. The three major Korean battery companies in top 10 lithium battery companies in the world are all adding LiFePO4 batteries. Samsung SDI is working hard to develop lithium iron phosphate batteries.
LG New Energy has previously planned to introduce lithium iron phosphate batteries to the energy storage system market. In February this year, a number of people familiar with the matter revealed that LG New Energy is developing lithium iron phosphate pouch batteries for electric vehicles. It aims for batteries with 20 percent higher energy density than its rival CATL, and hopes to supply them to Tesla. SK On is also developing lithium iron phosphate batteries.
In terms of other companies, on February 14, Ford Motor announced that it will invest 3.5 billion US dollars to build a lithium iron phosphate battery factory in Marshall, Michigan. It is worth noting that Ford plans to add lithium iron phosphate battery solutions to its core electric vehicle market. CATL will provide technical and service support for the production of Ford's lithium iron phosphate battery factory.
Recently, foreign media reported that Hyundai Motor is considering starting to use lithium iron phosphate batteries produced by Ningde Times on Kia’s second-generation Ray EV. This will be the first electric vehicle launched by Hyundai Motor equipped with lithium iron phosphate batteries. This is not the first cooperation between the two parties. Hyundai Motor has introduced ternary lithium batteries produced by CATL before.
It can be foreseen that the competition in the lithium iron phosphate battery track will be more intense in the future, but this also encourages various companies to improve their own strength and technical level.
4. The proportion of global lifepo4 battery is expected to increase
With the continuous innovation and development of lithium iron phosphate battery technology, its installed capacity in the international market is expected to further increase. It is understood that China's power battery pattern has reversed, and the installed capacity of lithium iron phosphate batteries has officially surpassed that of ternary batteries.
According to relevant research institutions, lithium iron phosphate batteries rely on their cost-effective advantages, and with the continuous advancement of technology, it is estimated that the installed capacity of lithium iron phosphate batteries will exceed 60% in the global power battery market in 2024.
Experts said that the market share of ternary lithium batteries will be further compressed in the future. Although ternary lithium battery technology is also constantly innovating, the biggest problem is the need for two rare elements, cobalt and nickel, which cannot be changed. In the absence of new formulas, the production and sales of ternary lithium batteries may decrease as the cost of raw materials rises in the future.
Another point of view pointed out that with the further optimization of the material system and process in the future, there is still a lot of room for improvement in the energy density of lithium iron phosphate batteries. In this context, relevant Chinese companies have successively launched phosphoric acid material system battery products with higher energy density and better low-temperature performance, including lithium manganese iron phosphate and M3P battery.