Overseas battery giants kill in the field of lithium iron phosphate batteries

The cost advantage and broad market prospect of lithium iron phosphate make LG new energy and SKI salivating.

Foreign markets, including LG New Energy, SKI, Samsung SDI and Panasonic batteries, used to focus on the technical route and direction of ternary batteries and quaternary batteries. However, with the continuous improvement of lithium iron phosphate energy density and higher economy, after Tesla, Volkswagen and other international head car companies have "made love" to lithium iron phosphate batteries, LG new energy and SKI have said that they will cut into the field of lithium iron phosphate technology.

On October 5th, it was reported that, SKI CEO was considering the development of lithium iron phosphate battery. "although its energy density is lower than that of ternary battery, it has obvious advantages in cost and thermal stability". It is reported that at present, SKI mainly produces medium-nickel and high-nickel ternary soft bag batteries, which have more advantages in energy density and can meet the longer mileage of vehicles.

A month ago, LG New Energy also revealed that it would be involved in the field of lithium iron phosphate technology. In early September, according to foreign media reports, LG New Energy, a subsidiary of LG Chemical, has begun to develop lithium iron phosphate batteries, and the new products are expected to be trial-produced in 2022.

It is reported that LG New Energy has developed lithium iron phosphate batteries in its battery laboratory in Daejeon (Daejeon), South Korea, and the new products will be in the form of soft packages. LG New Energy plans to set up a trial production line as early as next year.

Although it is the second largest power battery manufacturer in the world, up to now, LG New Energy has been focused on the research and development of power battery technology route of ternary and quaternary materials such as NCM and NCMA, but does not really pay attention to the technology route of lithium iron phosphate battery. Like SKI, LG New Energy has previously focused on battery technology research and development on materials with higher energy density, in pursuit of higher mileage to meet the mid-and high-end market models.

However, under the background that Tesla, Volkswagen, BYD and Xiaopeng Automobile have begun to increase the proportion of lithium iron phosphate battery use, it is obvious that LG new energy has realized that lithium iron phosphate battery itself has great commercial potential, ignoring this technical route will undoubtedly miss the huge market.

It is worth noting that not only LG new energy may produce lithium iron phosphate batteries in the future, but its parent company, LG Chemistry, will also be involved in the business of lithium iron phosphate battery materials. South Korean media analysis said, "LG Chemical may set up a joint venture with its Chinese partners to supply LG new energy with raw materials for the production of lithium iron phosphate batteries."

LG new energy to lithium iron phosphate march, should be the most profound feeling.

Previously, the power batteries used by Tesla were all ternary batteries, and LG New Energy was able to become its main supplier after the start of production at the Tesla (Shanghai) plant. However, in order to reduce costs, the Tesla (Shanghai) factory has switched all the Model 3 standard life versions to lithium iron phosphate batteries since the fourth quarter of 2020; in 2021, Tesla (Shanghai) plant began to equip the Model Y standard service version with lithium iron phosphate batteries.

At present, the ternary batteries of Model 3 and Mdoel Y in Tesla (Shanghai) Plant are mainly provided by LG New Energy, while Lithium Iron Phosphate batteries are provided by Ningde Times.

With the increasing proportion of lithium iron phosphate batteries used in Model 3 and Model Y, the installed capacity of LG new energy in China has also been greatly affected. According to the data of Power Battery Application Branch, in the first half of this year, the installed capacity of power batteries driven by Model 3 and Model Y in Tesla (Shanghai) Factory was about 11.13GWH, of which the installed capacity of driving Ningde era was about 6.06GWhPowerLG new energy supply was about 5.07GWh. After Tesla (Shanghai) factory increased the proportion of lithium iron phosphate batteries, the main supply position of LG new energy was replaced by Ningde era.

With the change of market ownership and broad prospects, the technical route focused by automobile companies has changed, and all kinds of pressures are promoting the layout of LG new energy to lithium iron phosphate battery technology.

Thanks to the cost and safety performance advantages of lithium iron phosphate battery itself, as well as the innovation of material and system integration (CTP, blade battery), the application scene of lithium iron phosphate battery has been continuously broadened, and the main models have launched lithium iron phosphate versions, and sales continue to be hot.

Data from the Power Battery Application Branch show that in the first half of this year, the installed capacity of power batteries for new energy vehicles in China was about 53.67GWh. Among them, the installed capacity of lithium iron phosphate batteries was about 22.52GWH, accounting for 42%, compared with 27.42% in the same period last year. For comparison, the installed capacity of ternary batteries in the first half of this year was 31.03 GWH, accounting for 57.8%, compared with 72.2% in the same period last year. Between one liter and one drop, the "strong return" of lithium iron phosphate battery is highlighted.

It is worth noting that in terms of growth rate, the installed capacity of lithium iron phosphate batteries in the Chinese market from January to June last year was about 4.8 GWH, an increase of 369.7% this year.

In terms of production, the latest data show that in August this year, the output of lithium iron phosphate batteries in the Chinese market was about 11.1GWH, accounting for 56.9% of the total battery output in China's market. From January to August, the output of lithium iron phosphate batteries was about 58.1GWH, accounting for 52.1% of the total battery output.

Chinese market data show that in July and August this year, lithium iron phosphate batteries were installed as 6.21GWh and 7.57GWh respectively, surpassing the installed capacity of 5.84GWh and 6.06GWh of ternary batteries for two months in a row, and this trend is expected to continue.

China as the world's largest new energy vehicle market, after the decline of financial subsidies, the market position of lithium iron phosphate battery continues to be prominent, which shows the market recognition and practical demand for it. In fact, since the beginning of this year, battery companies, including Ningde Times, Fudi Battery, Yiwei Lithium Energy, Honeycomb Energy, AVIC Lithium Power, Vision Power and other battery companies have been increasing the capacity distribution of lithium iron phosphate batteries; upstream investment in lithium iron phosphate materials is increasing frequently.

From a global point of view, lithium iron phosphate battery technology, which is led and promoted by Chinese battery industry chain enterprises, has also been recognized by global automobile companies, and the permeability of lithium iron phosphate battery in the global market is also increasing steadily.

Tesla CEO Musk has publicly said that in the future Tesla 2UniPac 3 battery will choose lithium iron phosphate battery. In addition, Tesla also sent an email to American users, announcing that American users can choose models with lithium iron phosphate batteries from China.

Volkswagen also revealed at its first Power Day on batteries this year that lithium iron phosphate batteries will be one of the main battery routes for its platform models in the future.

Hyundai Motor has begun developing electric vehicles with lithium iron phosphate batteries in the first half of this year and will launch them outside China, according to South Korean media reports.

It has been reported that Apple, the technology giant that plans to launch electric cars in 2024, will also use lithium iron phosphate batteries, citing safety concerns.

Previously, the neglect of lithium iron phosphate batteries by international power battery companies, including LG New Energy, Panasonic Battery, Samsung SDI, SKI and other international power battery companies, is causing them to miss out on a large market. Now LG new energy, SKI has made it clear that it will layout lithium iron phosphate battery, in the future, do not rule out Panasonic battery, Samsung SDI, Northvolt and other overseas battery giants will also follow.