Currently, LFP has become the dominant technology route among cathode materials for lithium batteries. The latest data released by the China Automotive Power Battery Industry Innovation Alliance shows that in the first eight months of this year, China's cumulative installed volume of LFP batteries reached 402.7 GWh, accounting for 82.3% of total installed volume, up 18.3% YoY; cumulative ESS battery sales reached 450.5 GWh, accounting for 32.5% of total sales, up 83.8% YoY. ESS battery cathode materials are almost entirely LFP. Based on demand estimates for key materials used in power and other batteries, China's LFP material demand reached 3.124 million mt in the first eight months of this year.
Ouyang Minggao, an academician of the Chinese Academy of Sciences, also predicted in a public speech in early September: "I believe that over the next 10 years, LFP batteries will continue to dominate the lithium-ion power battery and ESS battery markets." He noted that the two technology routes of high energy density and low cost will coexist over the long term and are both indispensable. One development route is the evolution from liquid lithium-ion batteries to solid-liquid hybrid batteries and all-solid-state batteries; the other route is the development of low-cost, long-life LFP and sodium-ion batteries.
With promising market prospects, industrial investment and capacity expansion are also heating up. Battery Network noted that in September, multiple LFP cathode material projects reported progress updates, with planned capacity totaling 1.32 million mt:
RMB4 billion! A 400,000 mt/year LFP project breaks ground in Xuzhou, Jiangsu
According to "Xuzhou Release," on September 28, the 400,000 mt LFP project of Xuzhou Xinrui Lithium Battery officially began construction in the Xuzhou Economic and Technological Development Zone. The LFP project that commenced construction is a major initiative by GCL Group in the fields of power batteries and key ESS materials, and is highly aligned with Xuzhou's direction of strengthening, extending, and supplementing its industrial chain. Once operational, the project will further enhance the supporting supply capacity of lithium battery cathode materials.
Public information from the Jiangsu Provincial Development and Reform Commission shows that the energy-saving report for the 400,000 mt/year LFP project of Xuzhou Xinrui Lithium Battery Materials Co., Ltd. has received administrative approval. The project is invested and constructed by Xuzhou Xinrui Lithium Battery Materials Co., Ltd., a wholly-owned subsidiary of GCL Lithium Energy (Suzhou) Co., Ltd., which is a company under GCL Technology (03800.hk).
It is reported that the project has an investment of up to RMB4 billion and is located within the plant area of Jiangsu GCL Silicon Material Technology Development Co., Ltd. at No. 88 Yangshan Road, Xuzhou Economic and Technological Development Zone, Jiangsu Province. Construction will be carried out by leasing existing factory buildings and some public and auxiliary facilities, with no new industrial land added.
Approximately RMB24.567 billion! Gotion High-tech partners with Volkswagen to expand lithium battery and LFP production outside China
On September 28, Gotion High-tech (002074) announced that, in order to implement the company's overseas power battery industrial layout, enhance its global market competitiveness, and further deepen its long-term strategic partnership with Volkswagen Group, the company and its wholly-owned subsidiaries Gotion High-Tech (HK) Limited, Gotion GmbH, and Gotion Power Africa S.A.S. (collectively referred to as the "Gotion Parties") intend to sign an Investment Agreement with Volkswagen AG (hereinafter referred to as "Volkswagen Group") and its wholly-owned subsidiaries PowerCo SE and Power Holdco Lux S.A. (collectively referred to as the "PowerCo Parties").
The announcement shows that under these agreements, the two parties will establish three joint ventures in Valencia, Spain; Surany, Slovakia; and Kenitra, Morocco (hereinafter referred to as the "Valencia JV," "Surany JV," and "Morocco JV," respectively) to invest in the construction of lithium battery and cathode material production sites. The total estimated project investment is approximately EUR3.222 billion (approximately RMB24.567 billion), of which the Gotion Parties will invest approximately EUR1.598 billion (approximately RMB12.185 billion) and the PowerCo Parties will invest approximately EUR1.624 billion (approximately RMB12.383 billion). The Gotion Parties' capital contribution will come from self-owned funds and self-raised funds.
Among these, the two parties intend to use the Morocco JV as the entity to invest in the construction of a 100,000 mt/year LFP cathode material project, with a total investment of approximately EUR480 million (approximately RMB3.66 billion). The Morocco JV will be formed after Gotion Power establishes a new company entity in Kenitra, Morocco, and then accepts a capital increase from PowerCo Lux. After the completion of this investment, the Gotion Parties will hold 51.00% equity in the JV, and the PowerCo Parties will hold 49.00% equity, making the JV a controlled subsidiary of the Gotion Parties.
Total investment raised to RMB1.65 billion! Hunan Yuneng's Spain cathode material project expands further
On September 23, Hunan Yuneng (301358) announced that the 25th meeting of the company's second board of directors reviewed and approved the "Proposal on Increasing Investment in the Spain Project," agreeing to raise the construction scale of the Spain project from the original 50,000 mt/year lithium battery cathode material project to 70,000 mt/year, and to adjust the total investment from approximately RMB982 million to approximately RMB1.65 billion (final amount subject to actual investment).
The announcement shows that as of now, the Spain project company has been established, and the project is progressing in an orderly manner with construction. Against the backdrop of rapidly growing demand in markets outside China, Hunan Yuneng plans to raise the construction scale of the Spain project to 70,000 mt/year of lithium battery cathode materials. At the same time, due to factors such as construction and operating conditions at the project site, the unit investment intensity for civil engineering, cross-border procurement, transportation and installation of equipment, and initial working capital has increased compared with earlier projections. Taking the above into account, after recalculation, the total investment of the Spain project has been adjusted to approximately RMB1.65 billion (final amount subject to actual investment), with funding sources being self-owned funds and self-raised funds.
Hunan Yuneng stated that in H1 this year, the company's overseas sales achieved leapfrog growth, mainly driven by the outstanding performance and cost-effectiveness of LFP materials, as markets outside China are transitioning from ternary to LFP, with LFP penetration rising rapidly. Going forward, driven by both exports and supply from the Spain production site once completed, the company's overseas business sales are expected to achieve rapid growth.
400,000 mt! Hunan Yuneng's LFP project officially lands in Guizhou
According to the official website of the Weng'an County People's Government of Qiannan Buyei and Miao Autonomous Prefecture, Guizhou Province, on September 18, Yuneng Wengfa (Guizhou) New Energy Battery Materials Co., Ltd. (hereinafter referred to as "Yuneng Wengfa") issued the first environmental impact assessment public notice for its 400,000 mt LFP production line project.
The public notice shows that the project will be located in the Fine Chemical Park of Weng'an Economic Development Zone, Yinzhan Town, Weng'an County, Qiannan Buyei and Miao Autonomous Prefecture, Guizhou Province. It plans to build a new 400,000 mt/year LFP production line, warehouses, substations, fire protection facilities, and other production and auxiliary facilities, along with supporting R&D buildings, logistics buildings, and other public and auxiliary works.
Public information shows that Yuneng Wengfa is a wholly-owned subsidiary of Hunan Yuneng (301358), established in August 2026 with registered capital of RMB1.5 billion. Its business scope includes manufacturing of electronic specialty materials, R&D of electronic specialty materials, sales of electronic specialty materials, and fertilizer sales.
350,000 mt! New progress on the high-compaction density LFP joint venture project between Fulin Precision Machining and CATL
According to local media reports in Sichuan, on September 10, the first batch of products rolled off the line in Zone B of the 350,000 mt/year new energy lithium battery cathode material project of Sichuan Fulin New Materials Co., Ltd., located in the Deyang-Aba Ecological Economic Industrial Park in Mianzhu, Sichuan Province.
It is reported that the 350,000 mt of new-type high-compaction density LFP can be used to manufacture power batteries for approximately 1.4 million pure electric sedans, with an output value of approximately RMB18 billion at current prices.
Public information shows that the project is jointly invested by Fulin Precision Machining (300432) and CATL (300750), and is being constructed in two zones, A and B. Once fully completed, it will form an annual production capacity of 350,000 mt of new-type high-compaction density LFP. Previously, Zone A of the project was completed and reached full production. Zone B will also complete capacity ramp-up within this month and reach full production.
In addition, several iron phosphate and iron phosphate (manganese) lithium projects also reported new developments in September:
On September 28, the 300,000 mt iron phosphate continuous production project of Binzhou Jiuhuan Xinyue New Energy Materials Co., Ltd. went into operation. The project has a total investment of RMB2.578 billion, covers an area of 147.2 mu, and is being implemented in three phases. The Phase 1 50,000 mt iron phosphate project has already gone into operation, and the Phase 2 100,000 mt battery-grade iron phosphate project has officially started construction. Once fully operational, the project will achieve an annual production capacity of 300,000 mt of high-performance iron phosphate.
According to Guiyang Converged Media Center on September 28, Li Yong, project department manager of Guizhou Anda Energy Technology Co., Ltd. (920809), said in an interview that for the 450,000 mt/year LFP precursor construction project newly built last year, the main framework of the plant buildings is now basically complete, and large equipment is being brought in for installation. The project is expected to go into operation by the end of this year.
On September 21, Hubei Yihua (000422) announced that, in order to extend its new energy materials industry chain layout, it plans to have its wholly-owned subsidiary Hubei Yihua New Energy Technology Co., Ltd. invest in the construction of a 150,000 mt/year iron phosphate project, with an estimated total investment of approximately RMB1.152 billion. Public information shows that iron phosphate is an important precursor for the new energy material LFP. The iron phosphate market has solid demand fundamentals, sufficient growth momentum, broad market space, and promising development prospects.
On September 16, the groundbreaking ceremony for Ya'an XTC New Energy's 40,000 mt/year iron phosphate (manganese) lithium project was held in the Economic and Technological Development Zone of Yucheng District, Ya'an, Sichuan Province. It is reported that the Phase 1 and Phase 2 projects of Ya'an XTC New Energy's 40,000 mt/year LFP went into production in July 2023, and the 40,000 mt/year iron phosphate (manganese) lithium project (Phase 3) is expected to go into production in August 2027.
What needs to be watched is that although LFP has received the "mainstream for the next decade" technology route judgment, "mainstreaming" is not a universal dividend, and demand growth does not mean capacity scarcity. The industrial upgrading of "low-end exits the market, high-end remains tight" is still ongoing. Low-end capacity and homogeneous products are repeatedly hitting bottom in price wars. Enterprises lacking advantages in technology, cost, and clients, relying on generic production lines and low-price order grabbing, are finding it increasingly difficult to cover depreciation, energy consumption, and capital costs. The high-end market, by contrast, is showing structural tightness due to requirements for high compaction density, long cycle life, fast charging, and low-temperature performance. Top-tier players are building high barriers through scale, R&D, cost, and client lock-in, and are winning the dividends.
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