The demand for lithium iron phosphate is continuing to be strong, and its market share has once again set a new high. According to data from the Power Battery Application Branch, in September, the domestic power battery installed capacity was 54.8GWh, up 44.4% year-on-year. Among them, the installed capacity of lithium iron phosphate batteries was 41.8GWh, up 81.4% year-on-year, accounting for 76.2% of the total installed capacity, setting a new historical high; the installed capacity of ternary batteries was 13.0GWh, accounting for 23.7% of the total installed capacity, down 12.9% year-on-year.
The lithium iron phosphate market has been "continuously" growing since 2021.
Since 2021, the market share of lithium iron phosphate batteries in China has already surpassed that of ternary batteries. Compared to ternary materials, lithium iron phosphate has advantages such as higher safety, better economic efficiency, and longer life. With the help of innovative technologies, the advantages of lithium iron phosphate in terms of safety and cost have become increasingly prominent in recent years, and the low-temperature performance of lithium iron phosphate batteries has continued to improve. The penetration rate of lithium iron phosphate batteries in the field of new energy vehicles has continued to increase.
In terms of exports, the growth of lithium iron phosphate batteries has also been very rapid. From January to September this year, the cumulative export volume of domestic power batteries was 92.5GWh, up 3.9% year-on-year. Among them, the export volume of lithium iron phosphate batteries was 34.1GWh, accounting for 36.9%, up 26.6% year-on-year; while the export volume of ternary batteries was down 6.6% year-on-year.
In terms of materials, according to data from the General Administration of Customs, the export volume of lithium iron phosphate in China was 538 tons in September 2024, up 105% from the previous month and up 1,212% from the same period last year, setting a new record for export volume.
01
Orders for lithium iron phosphate batteries are becoming more frequent.
As the inventory reduction gradually comes to an end, the prospects for the phosphate iron lithium industry are expected to further improve. Guotai Junan stated that the lithium battery industry is a sector whose fundamentals have actually improved due to policy-driven factors, and the short-term car market, coupled with the unexpectedly high output plan for energy storage, and the long-term European carbon emission regulations and the US rush to install energy storage systems are expected to boost demand in the coming year. The industry is experiencing a sharp increase in demand for high-end phosphate iron lithium, and the market has already seen a situation of supply shortages, with a price increase expected.
Battery China has noticed that orders involving lithium iron phosphate have significantly increased this year. In August, Fu Lin Precision Industry announced that its subsidiary Jiangxi Shenghua had signed an agreement with CATL, under which CATL paid a deposit to support Jiangxi Shenghua's project to build a 7.5-million-ton-per-year plant for lithium iron phosphate materials. CATL promised to purchase at least 140,000 tons of lithium iron phosphate from Jiangxi Shenghua annually from 2025 to 2027, provided that the products had comprehensive advantages.
There is an unusually high demand for lithium iron phosphate (LFP) batteries in overseas markets, especially in Europe and the United States. European car giant Stellantis says that LFP batteries are more cost-competitive and can produce more affordable vehicles for the middle class. Additionally, this type of battery has the characteristics of long life and high thermal stability, which helps provide high-quality and durable electric vehicles for customers. According to industry estimates, the total demand for power and energy storage batteries in Europe will reach 150GWh by 2030, with about half of that, or 750GWh, using the LFP route.
In July this year, French car manufacturer Renault signed a 39GWh lithium iron phosphate battery procurement contract, which will be used to support its electric vehicles with a total of about 600,000 units. It is reported that Renault's electric vehicle business department Ampere will cooperate with LG Energy Solution and CATL to establish a lithium iron phosphate battery supply chain in Europe.
In terms of equipment, in March this year, XianDai Intelligent Equipment Co., Ltd. stated that the company had signed a global strategic cooperation agreement with American battery manufacturer ABF to provide ABF with lithium battery smart production line services with a total scale of 20GWh. It is said that this was the largest lithium battery equipment order that a Chinese company had received in the United States at the time. ABF is an American battery manufacturer specializing in the manufacture of lithium iron phosphate batteries, and its first production line located in Tucson, Arizona, is expected to come into operation in 2025.
It is worth noting that earlier this year, Samsung SDI stated that it was considering using equipment supplied by Chinese suppliers in its production line for lithium iron phosphate batteries. Sources revealed that Samsung SDI held closed-door meetings with potential suppliers to explain its plans for its lithium iron phosphate battery production project. Samsung SDI is expected to place orders for equipment this year and begin installing it next year, with its lithium iron phosphate battery production line likely to be built in the Ulsan factory.
02
Capacity expansion is in full swing.
According to industry estimates, the global demand for power batteries will exceed 3500GWh by 2030, while the demand for energy storage batteries will reach 1200GWh. In the power battery sector, lithium iron phosphate batteries are expected to account for 45% of the market share, with demand exceeding 1500GWh. In the energy storage sector, lithium iron phosphate batteries are expected to account for over 85% of the market share, with demand exceeding 1000GWh.
Faced with robust market demand, battery and material manufacturers are stepping up their investments in lithium iron phosphate. In July this year, ACT Battery, a joint venture between BYD and American battery maker Maxwell Technologies, broke ground on a project in Mississippi, US, with an annual production capacity of about 21GWh of square lithium iron phosphate batteries, expected to start deliveries in 2026; and Envision AESC, a battery maker backed by Chinese energy giant Envision Group, started construction on a factory in Spain, which will become its first lithium iron phosphate battery factory in Europe upon completion in 2026.
In March this year, it was reported that CATL was in talks with General Motors to explore a technology licensing partnership and jointly build a lithium iron phosphate power battery factory in North America. The planned annual capacity of the factory is no less than that of the factory CATL built with Ford Motor, meaning the capacity scale will exceed 35GWh.
In terms of materials, in October this year, Longpan Technology, a subsidiary of Longpan Science and Technology, held an investment signing ceremony for its first overseas lithium iron phosphate factory in the world. The Indonesia Investment Agency (INA) and Changzhou Lithium Source jointly signed a $200 million investment intent letter. This investment plan will enable Changzhou Lithium Source's Indonesia factory to expand its capacity from the current phase 1 annual output of 30,000 tons to 120,000 tons. Upon completion and put into operation, the project may become the largest lithium iron phosphate cathode material manufacturing plant outside of China.
In September this year, the Xiamen lithium iron phosphate project of Shengtun Mining Group was put into operation, with a total investment of about 3.1 billion yuan. The project plans to build a 200,000-tonne lithium iron phosphate production base. According to the plan, the project will be divided into two phases and is scheduled to be fully completed and put into operation in the fourth quarter of 2026. Similarly, in September, Wanrun New Energy announced that it would build a 50,000-tonne lithium iron phosphate production facility in South Carolina, USA.
Currently, more and more car manufacturers are adopting lithium iron phosphate batteries. In addition to domestic manufacturers, international car manufacturers such as Tesla, Volkswagen, BMW, Mercedes-Benz, Ford, Hyundai, Renault, General Motors, Nissan, and Honda have already or plan to further expand the installation of lithium iron phosphate batteries. From a global perspective, the market share of lithium iron phosphate batteries will continue to increase in the future.
The demand for lithium iron phosphate is continuing to be strong, and its market share has once again set a new high. According to data from the Power Battery Application Branch, in September, the domestic power battery installed capacity was 54.8GWh, up 44.4% year-on-year. Among them, the installed capacity of lithium iron phosphate batteries was 41.8GWh, up 81.4% year-on-year, accounting for 76.2% of the total installed capacity, setting a new historical high; the installed capacity of ternary batteries was 13.0GWh, accounting for 23.7% of the total installed capacity, down 12.9% year-on-year.
The lithium iron phosphate market has been "continuously" growing since 2021.
Since 2021, the market share of lithium iron phosphate batteries in China has already surpassed that of ternary batteries. Compared to ternary materials, lithium iron phosphate has advantages such as higher safety, better economic efficiency, and longer life. With the help of innovative technologies, the advantages of lithium iron phosphate in terms of safety and cost have become increasingly prominent in recent years, and the low-temperature performance of lithium iron phosphate batteries has continued to improve. The penetration rate of lithium iron phosphate batteries in the field of new energy vehicles has continued to increase.
In terms of exports, the growth of lithium iron phosphate batteries has also been very rapid. From January to September this year, the cumulative export volume of domestic power batteries was 92.5GWh, up 3.9% year-on-year. Among them, the export volume of lithium iron phosphate batteries was 34.1GWh, accounting for 36.9%, up 26.6% year-on-year; while the export volume of ternary batteries was down 6.6% year-on-year.
In terms of materials, according to data from the General Administration of Customs, the export volume of lithium iron phosphate in China was 538 tons in September 2024, up 105% from the previous month and up 1,212% from the same period last year, setting a new record for export volume.
01
Orders for lithium iron phosphate batteries are becoming more frequent.
As the inventory reduction gradually comes to an end, the prospects for the phosphate iron lithium industry are expected to further improve. Guotai Junan stated that the lithium battery industry is a sector whose fundamentals have actually improved due to policy-driven factors, and the short-term car market, coupled with the unexpectedly high output plan for energy storage, and the long-term European carbon emission regulations and the US rush to install energy storage systems are expected to boost demand in the coming year. The industry is experiencing a sharp increase in demand for high-end phosphate iron lithium, and the market has already seen a situation of supply shortages, with a price increase expected.
Battery China has noticed that orders involving lithium iron phosphate have significantly increased this year. In August, Fu Lin Precision Industry announced that its subsidiary Jiangxi Shenghua had signed an agreement with CATL, under which CATL paid a deposit to support Jiangxi Shenghua's project to build a 7.5-million-ton-per-year plant for lithium iron phosphate materials. CATL promised to purchase at least 140,000 tons of lithium iron phosphate from Jiangxi Shenghua annually from 2025 to 2027, provided that the products had comprehensive advantages.
There is an unusually high demand for lithium iron phosphate (LFP) batteries in overseas markets, especially in Europe and the United States. European car giant Stellantis says that LFP batteries are more cost-competitive and can produce more affordable vehicles for the middle class. Additionally, this type of battery has the characteristics of long life and high thermal stability, which helps provide high-quality and durable electric vehicles for customers. According to industry estimates, the total demand for power and energy storage batteries in Europe will reach 150GWh by 2030, with about half of that, or 750GWh, using the LFP route.
In July this year, French car manufacturer Renault signed a 39GWh lithium iron phosphate battery procurement contract, which will be used to support its electric vehicles with a total of about 600,000 units. It is reported that Renault's electric vehicle business department Ampere will cooperate with LG Energy Solution and CATL to establish a lithium iron phosphate battery supply chain in Europe.
In terms of equipment, in March this year, XianDai Intelligent Equipment Co., Ltd. stated that the company had signed a global strategic cooperation agreement with American battery manufacturer ABF to provide ABF with lithium battery smart production line services with a total scale of 20GWh. It is said that this was the largest lithium battery equipment order that a Chinese company had received in the United States at the time. ABF is an American battery manufacturer specializing in the manufacture of lithium iron phosphate batteries, and its first production line located in Tucson, Arizona, is expected to come into operation in 2025.
It is worth noting that earlier this year, Samsung SDI stated that it was considering using equipment supplied by Chinese suppliers in its production line for lithium iron phosphate batteries. Sources revealed that Samsung SDI held closed-door meetings with potential suppliers to explain its plans for its lithium iron phosphate battery production project. Samsung SDI is expected to place orders for equipment this year and begin installing it next year, with its lithium iron phosphate battery production line likely to be built in the Ulsan factory.
02
Capacity expansion is in full swing.
According to industry estimates, the global demand for power batteries will exceed 3500GWh by 2030, while the demand for energy storage batteries will reach 1200GWh. In the power battery sector, lithium iron phosphate batteries are expected to account for 45% of the market share, with demand exceeding 1500GWh. In the energy storage sector, lithium iron phosphate batteries are expected to account for over 85% of the market share, with demand exceeding 1000GWh.
Faced with robust market demand, battery and material manufacturers are stepping up their investments in lithium iron phosphate. In July this year, ACT Battery, a joint venture between BYD and American battery maker Maxwell Technologies, broke ground on a project in Mississippi, US, with an annual production capacity of about 21GWh of square lithium iron phosphate batteries, expected to start deliveries in 2026; and Envision AESC, a battery maker backed by Chinese energy giant Envision Group, started construction on a factory in Spain, which will become its first lithium iron phosphate battery factory in Europe upon completion in 2026.
In March this year, it was reported that CATL was in talks with General Motors to explore a technology licensing partnership and jointly build a lithium iron phosphate power battery factory in North America. The planned annual capacity of the factory is no less than that of the factory CATL built with Ford Motor, meaning the capacity scale will exceed 35GWh.
In terms of materials, in October this year, Longpan Technology, a subsidiary of Longpan Science and Technology, held an investment signing ceremony for its first overseas lithium iron phosphate factory in the world. The Indonesia Investment Agency (INA) and Changzhou Lithium Source jointly signed a $200 million investment intent letter. This investment plan will enable Changzhou Lithium Source's Indonesia factory to expand its capacity from the current phase 1 annual output of 30,000 tons to 120,000 tons. Upon completion and put into operation, the project may become the largest lithium iron phosphate cathode material manufacturing plant outside of China.
In September this year, the Xiamen lithium iron phosphate project of Shengtun Mining Group was put into operation, with a total investment of about 3.1 billion yuan. The project plans to build a 200,000-tonne lithium iron phosphate production base. According to the plan, the project will be divided into two phases and is scheduled to be fully completed and put into operation in the fourth quarter of 2026. Similarly, in September, Wanrun New Energy announced that it would build a 50,000-tonne lithium iron phosphate production facility in South Carolina, USA.
Currently, more and more car manufacturers are adopting lithium iron phosphate batteries. In addition to domestic manufacturers, international car manufacturers such as Tesla, Volkswagen, BMW, Mercedes-Benz, Ford, Hyundai, Renault, General Motors, Nissan, and Honda have already or plan to further expand the installation of lithium iron phosphate batteries. From a global perspective, the market share of lithium iron phosphate batteries will continue to increase in the future.
