Lithium iron phosphate batteries dominated the market for the first time in four years

In 2021, the shipment growth rate of lithium iron phosphate battery has far exceeded the ternary lithium battery that has occupied the market advantage for many years. According to the above data, the installed capacity of lithium iron phosphate and ternary lithium batteries in the domestic power battery market in 2021 will account for 53% and 47% respectively, completely reversing the trend that the output of lithium iron phosphate batteries has been less than ternary lithium batteries since 2018.

Chen Yongchong, a professor at the Institute of Electrical Engineering of the Chinese Academy of Sciences, told reporters, “The explosive growth of lithium iron phosphate battery shipments is attributable to the rapid development of China’s new energy vehicle industry. Although the impact of COVID-19 in the past year still remains, the trend of rapid development of China’s new energy vehicle industry has not changed in terms of market production and sales. At the same time, in the context of carbon peak and carbon neutrality targets, new energy vehicles have received unprecedented attention.”

The latest statistics of China Association of Automobile Manufacturers: In 2021, the cumulative production of New energy vehicles in China is 3.545 million units, with a year-on-year growth of up to 159.5%, and the market share has risen to 13.4%.

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It is worth noting that the shipment growth rate of lithium iron phosphate battery once “outperformed” the production growth rate of new energy vehicles, which is directly related to the gradual decline of subsidies for new energy vehicles in China. China’s new energy vehicle subsidies are expected to be withdrawn in 2023, and the advantage of ternary lithium batteries to obtain policy subsidies due to their higher energy density will be weakened. Combined with the rising market demand for lithium iron phosphate batteries in the field of electrochemical energy storage in the next few years, the growth rate of lithium iron phosphate batteries will far exceed that of ternary lithium batteries.

Product performance and cost advantage

In addition to the positive external environment, the product strength of lithium iron phosphate battery is also rapidly improving. The current product performance and cost advantages of lithium iron phosphate batteries have been outstanding, which is an important factor for its “comeback” in 2021.

Since 2020, byd launched since the blade lithium iron phosphate batteries, lithium battery energy density less than three yuan has weakened the traditional disadvantages of ongoing technological innovation at the same time make the lithium iron phosphate batteries can meet the demand of all below the range of 600 km models, especially the new energy car companies such as byd, tesla to lithium iron phosphate battery demand growth has brought strong power.

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Compared with ternary lithium batteries with high prices and relatively scarce metals such as cobalt and nickel, the cost of lithium iron phosphate battery is lower, especially when the price of raw materials such as lithium anode, cathode and electrolyte rises, the cost pressure of large-scale production is relatively small.

In 2021, the prices of lithium carbonate and cobalt, the upstream raw materials of lithium batteries, will soar. Even in the international market where terpolymer lithium batteries originally occupied a significant advantage, Tesla, BMW, Ford, Hyundai, Renault and other car companies have said they will consider switching to lithium iron phosphate batteries with cost-effective advantages.

It is worth noting that the accident probability of ternary lithium batteries is still much higher than that of lithium iron phosphate batteries, the key reason is that the internal structure design of the latter is relatively safer.

Post time: Feb-23-2022