LFP Battery – The Future of Power Battery Market?

SHANGHAI, Apr 29 (SMM) - Recently Tesla disclosed that among the vehicles produced in the first quarter, nearly half of the vehicles are equipped with lithium iron phosphate (LFP) batteries, whose cost is lower compared to the traditional NMC battery. The news signalled the global new energy power market that the LFP battery is gaining popularity all over the world. The nickel and cobalt metal, as important raw materials for NMC batteries, have both met difficulties recently. Nickel supply has been affected by the conflict between Russia and Ukraine, while cobalt, due to flooding in South Africa that led to the suspension of the Durban port, is challenged by potential global cobalt supply chain disruption. But LFP supply chain is more stable compared with NMC batteries. And coupled with lower cost, LFP battery has become the star of the market in China and abroad.

In China, a number of car companies are focusing their efforts on LFO batteries. According to recent domestic news reports, Geely's LFP battery project with an annual output of 20GWh will be launched in Yingtan High-tech Zone, with a total investment of 10 billion yuan.

BYD is not only the world's first car company that fully stops the production of fuel cars, but also the world's first to complete adopt LFP batteries. That is, no NMC batteries will be found in the new generation of DM-i. In the A00 field,Wuling, Chery and Chang’an are also making bold actions to use LFP batteries as a low-cost solution. Among the new car-making forces, Leap Motor, Xiaopeng and NIO are all rapidly advancing the transition to LFP batteries.

According to statistics, LFP battery beat NMC battery and gained the lion’s share in the power battery market in 2021 after lagging behind for three years. At the same time, in consideration of cost, safety and other multiple factors, the downstream has posted a clear lean to the LFP battery side.

And in the face of carbon peaking and carbon neutrality strategies, LFP battery will become more and more important in the electric vehicle market, and is also likely to play a role in energy storage market. It can be reasonably predicted that the LFP battery still has huge potentials in the future.