In the next five years, lithium iron phosphate shipments will reach the most exciting part of 800GWh material manufacturers' production expansion.

Lithium iron phosphate investment boom after wave after wave. On October 18, Longyi Technology announced that its holding subsidiary, Changzhou Liyuan, plans to acquire 100% stake in Sichuan Liyuan, a wholly owned grandson company, for 100 million yuan. Longyi Technology said that Changzhou Lithium Source will become the only main body engaged in the business of lithium iron phosphate cathode materials in the company. it is convenient for the company to further enhance the comprehensive strength of project research and development, market expansion and product mass production in the lithium iron phosphate cathode material industry chain.

Prior to this, Dragon Technology announced on August 24th that Changzhou Liyuan and the people's Government of Juancheng County had signed the Cooperation Agreement on the Recycling Project of Lithium Iron Phosphate cathode material and the Iron Phosphate precursor Project. It plans to invest about 800 million yuan to build a "100000 ton lithium iron phosphate cathode material recycling project" and a "100000 ton iron phosphate precursor project" in Juancheng.

A week earlier, Longyi Science and Technology announced that Changzhou Liyuan planned to sign the "Investment Cooperation Agreement on Iron Phosphate Project" with New Yangfeng, and planned to jointly invest 200 million yuan to set up a joint venture company Hubei Fengli New Energy Technology Co., Ltd. in Jingmen City, Hubei Province. will invest in the construction of 50,000 tons / year iron phosphate project.

In addition to dragon technology, Hong Kong stock environmental protection leader Conch Entrepreneurship announced on October 10 that the company has signed an investment agreement with the Wuhu Economic Development District Management Committee on the lithium iron phosphate cathode material project, planning and construction of a high-performance lithium iron phosphate battery cathode material project with an annual output of 500000 tons. Among them, the first phase of the project invests about 1 billion yuan, and plans to build a project with an annual output of 50, 000 tons of lithium iron phosphate cathode materials and supporting facilities. it is planned to start construction this year and put into production by the end of next year.

Earlier, Hunan Ningxiang High-tech Zone signed a contract with Hunan Bangsheng Industrial holding Group Co., Ltd. on August 30 for the lithium iron phosphate project. The project, with a total investment of 12 billion yuan, will build a lithium iron phosphate project with an annual output of 200000 tons and 40 production lines. The product market is mainly for domestic mainstream battery enterprises such as Ningde era and BYD.

The installed capacity and output continue to exceed three yuan.

Lithium iron phosphate set off a capacity "arms race" due to the upsurge of downstream demand. According to data released by the China Association of Automobile Manufacturers, China's production and sales of new energy vehicles hit new highs in September, reaching 353000 and 357000 respectively. Year-on-year growth is 1.5 times. From January to September, the production and sales of new energy vehicles reached 2.166 million and 2.157 million respectively, an increase of 1.8 times and 1.9 times respectively over the same period last year. The production and sales of pure electric and plug-in hybrid vehicles have continued the momentum of rapid growth.

In terms of installed capacity, the installed capacity of power batteries in China in September this year was 15.7 GWH, an increase of 138.6% over the same period last year. Among them, the total loading of ternary batteries was 6.1 GWh, an increase of 45.6 percent over the same period last year, and the total loading of lithium iron phosphate batteries was 9.5 GWh, an increase of 309.3 percent over the same period last year. This is the lithium iron phosphate battery installed more than the ternary battery for three months in a row, and the growth rate is significantly higher than the ternary battery.

In terms of output, lithium iron phosphate also exceeds ternary. In September, the total domestic production of power batteries totaled about 23.2 GWH, an increase of 168.9 percent over the same period last year. Among them, the output of ternary batteries was 9.63 GWH, accounting for 41.56% of the total output, and the output of lithium iron phosphate batteries was 13.51 GWH, accounting for 58.31% of the total output. The output of lithium iron phosphate batteries has exceeded that of ternary batteries for five months in a row.

No manufacturer in China loves lithium iron phosphate battery more than BYD. Wang Chuanfu, chairman and president of BYD, said proudly: "BYD blade battery has pulled lithium iron phosphate back from marginalization on its own." Zeng Yuqun, chairman of Ningde Times, also claimed that Ningde era will gradually increase the production capacity of lithium iron phosphate batteries in the next three to four years, while the proportion of ternary batteries will gradually decrease.

Future demand growth is clear

In fact, the strong demand for lithium iron phosphate batteries has been clearly reflected in the matching of terminal models. Lithium iron phosphate has been launched in 6 of the top 10 new energy models sold in the Chinese market in 2020. At present, the models with top sales in the domestic market, such as Hongguang mini, Tesla Model 3, Tesla Model Y, BYD Han, Mercedes-Benz, Chery eQ1, Xiaopeng P7 and other models all have supporting lithium iron phosphate batteries.

Not long ago, Tesla said in the three quarterly reports that lithium iron phosphate batteries are being used worldwide for the standard continued versions of Model 3 and Moderl Y. This at least represents the technological direction for a long time to come. Tesla CEO Musk claims that he prefers lithium iron phosphate batteries, saying that lithium iron phosphate batteries can be charged up to 100 per cent, while ternary lithium batteries are only recommended to 90 per cent.

In addition, Volkswagen, which has been equipped with ternary batteries, revealed at its first Power Day in March that it would use lithium iron phosphate batteries in entry-level models; Hyundai began developing electric vehicles with lithium iron phosphate batteries in the first half of this year. Hyundai previously only produced and sold cars with lithium iron phosphate batteries in China, while vehicles sold in other regions use ternary batteries.

Industry analysts believe that as Tesla, Daimler, Hyundai, Volkswagen and other overseas car companies choose lithium iron phosphate solution in their electrification path, lithium iron phosphate battery is expected to achieve global matching. With the launch of more models equipped with lithium iron phosphate batteries, the demand for lithium iron phosphate will remain strong for a long time.

The Changjiang Securities Research report points out that lithium iron phosphate is the strongest demand logic link in the current lithium power industry chain. In 2021, the domestic output and installation of lithium iron will break through the 50% mark in the middle of the year. It is estimated that the proportion of lithium iron phosphate for passenger cars in China will exceed 50% from 2021 to 2023. The application of overseas lithium iron phosphate is expected to accelerate around 2023, and the proportion of global lithium iron phosphate is expected to tend to 40% in 2025.

The agency also said that the lithium iron phosphate scheme has a longer cycle life and better safety, so the trend of increasing share in the field of energy storage is more clear than that of the power battery market. It predicts that the global demand for lithium electric energy storage is expected to reach 180-200GWH in 2025, which may achieve a rapid growth of ten times in five years compared with 20GWh shipments around 2020.

Taking into account the increment of the energy storage industry, global shipments of lithium iron batteries are expected to reach 770GWh in 2025, a compound increase of about 70 per cent over 2020, and demand for lithium iron phosphate cathode is close to 1.8 million tons.