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Why did lithium iron phosphorus batteries rise in the market and occupy 41% of the market share?
As global demand for sustainable energy and electric vehicles continues to rise, lithium iron phosphorus (LFP) batteries have quickly become a force that cannot be ignored in the market. According to reports in 2023, LFP batteries’ global capacity market share in the electric vehicle market reached an impressive 41%.
The rapid rise of lithium iron phosphorus batteries in the market is mainly due to several key advantages. The first is its cost-effectiveness. Compared with lithium nickel cobalt manganese oxide batteries (Li-NMC), LFP batteries have lower production costs, which directly reduces the price of electric vehicles and further promotes sales. In addition, LFP batteries are safer than other battery types, with the risk of overheating or fire significantly reduced, giving consumers confidence in them.
"LFP batteries are a smart choice because they do not rely on rare minerals, which is critical for the sustainability of the global battery supply chain."
Another reason why LFP batteries are so popular is their environmental friendliness. The production process of lithium iron phosphorus is less damaging to soil and water resources, and its production does not require certain rare metals (such as nickel and cobalt), which allows it to have greater flexibility in resource recovery and reuse. Considering these factors, more and more car manufacturers are choosing LFP technology.
Currently, the Chinese market has adopted LFP batteries as mainstream technology, especially in battery energy storage. This year, LFP’s market share in China exceeded that of all other battery types. However, in the European and North American markets, the proportion of LFP batteries is relatively low, less than 10%. This shows that although LFP is rising rapidly in the Chinese market, other markets still need to be developed.
"In the past few years, the demand for LFP batteries has continued to grow, which not only reflects the maturity of the technology, but also shows the market's emphasis on environmentally friendly power supplies."
One of the biggest challenges with lithium-iron-phosphorus batteries is their energy density. Although LFP batteries have advantages in terms of safety and cost, their energy density is generally lower than that of Li-NMC batteries, which means that for batteries of the same size and weight, LFP provides less battery life. However, with the advancement of battery technology, this problem is expected to be gradually solved. Recent research and experiments show that the performance of LFP is steadily improving through improved materials and structural design.
In the electric vehicle industry, many manufacturers are beginning to explore new battery chemistries, such as sodium-lithium batteries (Na-ion), that do not rely on lead or other rare metals. Although these new batteries are not yet widely available on the market, they represent significant potential for future battery technology and are expected to challenge existing technologies in terms of price and performance.
For consumers, the consideration when choosing a battery type is not only the purchase cost, but also the long-term maintenance and use costs. Some analysts have pointed out that the relatively long-lasting nature and slower degradation rate of LFP batteries makes it more attractive for consumers to consider the return on their long-term investment.
“The cost-effectiveness of LFP batteries will allow them to dominate the market, especially as Western markets begin to shift towards renewable energy.”
As the electric vehicle market continues to expand, the future development of lithium iron phosphorus batteries will also attract the attention of global investors. These improvements are not limited to the batteries themselves, but also include optimization of the entire supply chain, requiring cooperation from all parties to ensure that batteries are sourced sustainably and ethically.
In this context, the rise of lithium-iron-phosphorus batteries also makes people think about future electric vehicle technology: Can we embrace a greener future through continuous innovation and improvement?
