Market Insight-Global LFP Battery Market Overview 2022
The global LFP battery market size is projected to reach US$ 61.91 Billion by 2028, from US$ 15.36 Billion in 2021, at a CAGR of 54.68% during 2022-2028.– Bossonresearch.com
The lithium iron phosphate battery (LiFePO4 battery) or LFP battery (lithium ferrophosphate) is a type of lithium-ion battery using lithium iron phosphate (LiFePO4) as the cathode material and a graphitic carbon electrode with a metallic backing as the anode. Because of their lower cost, high safety, low toxicity, long cycle life, and other factors, LFP batteries are finding several roles in vehicle use, utility-scale stationary applications, and backup power. LFP batteries are cobalt-free. However, the energy density of an LFP battery is lower than that of other common lithium-ion battery types such as nickel manganese cobalt (NMC) and nickel cobalt aluminum (NCA) and also has a lower operating voltage.
Since 2021, LFP batteries have received more and more attention, and the scope of the market has been expanding. Tesla said in the second quarter of the 2021 earnings report that two-thirds of future models will use LFP batteries. In 2022, LG Energy Solution announced that the production of ferric phosphate batteries is scheduled to be held at LG's plant in China in 2023. It is expected that in the future, LFP batteries will not only be widely used in electric vehicles, but also play an increasingly important role in energy storage and consumer electronics.
According to Bosson Research,The global LFP Battery market size is projected to reach US$ 619077.10 Million by 2028, from US$ 15364.91 million in 2021, at a CAGR of 54.68% during 2022-2028, Increasing electric vehicle usage will be the key driver for the market development. According to IEA, electric car sales reached a record high in 2021, despite supply chain bottlenecks and the ongoing Covid-19 pandemic. Compared with 2020, sales nearly doubled to 6.6 million (a sales share of nearly 9%), bringing the total number of electric cars on the road to 16.5 million. Also, the growing need for power storage systems is an important driver of the market. LFP devices were increasingly being used in power storage systems because of their high personality frequency, low cost, and small deployment space. Moreover, Consumer lithium batteries are widely used in 3C digital products such as mobile phones and computers, and the LFP battery market is expected to be fueled by the increased usage of consumer technology.
Figure 1. Global LFP Battery Market Size (M USD), 2017 VS 2028
Source: Secondary Sources, Expert Interviews and Bosson Research, 2023
However, the development of the market is facing many headwinds. First of all, the usage of alternative products brings a huge challenge to the LFP battery market. One of the alternatives is sodium-ion batteries which have the advantages of abundant resources and low cost. Secondly, poor energy density directly impacts the value of LFP in various applications. The low volumetric energy density (the amount of energy stored in a given volume) limits the battery capacity that can physically fit into a typical automotive drivetrain, putting an upper limit on vehicle range. Finally, as an important application field of LFP batteries, electric vehicles are regarded as having huge room for development. However, the development of new energy vehicles may not be as expected, and the impetus brought to the LFP market may not be sufficient.
Segment by Type, the three main types of LFP battery market are prismatic LFP batteries, soft pack LFP batteries, cylindrical LFP batteries. Currently, the prismatic LFP battery occupies the most important market share, accounting for 76.58% in 2021. Prismatic cells are the superior type of Lithium cell for use in any battery that is in a non-stationary environment. Also, prismatic cells offer an opportunity to drive down costs by diminishing the number of manufacturing steps. Due to its premium characteristics, more and more enterprises produce and use prismatic LFP batteries. Cylindrical LFP battery and soft pack LFP battery market share will only account for 23.08% and 0.34% respectively in 2021.
In terms of application scenarios, the LFP battery market includes electric vehicle, energy storage, and others. The electric vehicle segment has a dominant market position, with a market share of 52.04% in 2021 and the market size will grow at a CAGR of 47.81% during the forecast period. The development of electric vehicles has broad prospects and can provide more opportunities for the application of LFP batteries. However, it is expected that in the future, the market share of energy storage will surpass that of electric vehicles. In 2028, the market share of energy storage is expected to reach 56.71%.
By region, Asia-Pacific account for the highest revenue share at 93.81% in 2021. The top producers in Asia-Pacific in 2021 alone got 200GWh of new production lines running and by the end of last year cumulative manufacturing capacity reached 600GWh. The Asia-Pacific region will therefore continue to lead the market, which globally has announced 5,500GWh of manufacturing capacity to come online by 2030 at 300 facilities, but Europe and the US will have begun to eat into its share by then. The second largest market is Europe, accounting for 3.06% in 2021.
Global LFP Battery Market: Competitive Landscape
Currently, the global LFP battery market is highly concentrated. In 2021, the CR5 and HHI of the global LFP battery market are 88.35% and 34.01% respectively, showing a high market concentration. Players operating in the market are adopting various strategies such as partnerships, collaborations, mergers and acquisitions, and product development to expand their product portfolio and geographical distribution. Some of the key players operating in the global LFP battery market are CATL, BYD, Gotion High-tech, Ruipu Energy Co., Ltd, EVE Energy Co., Ltd, CALB, Great Power, Lishen Battery, ANC, Wanxiang A123, Hithium, Lithion (Valence), etc.
Key players in the LFP Battery Market include:
Bausch + Lomb
Alcon
Optos, PLC
Carl Zeiss
Topcon Corporation
IRIDEX Corporation
Lumenis
Dutch Ophthalmic Research Center (International) B.V
Quantel Medical
Nano Retina
OCULUS Optikgeräte GmbH
Oertli Instrumente
Ellex Medical Lasers
Geuder
Sonomed Escalon
ASICO
Millennium Surgical
Katena Products. Inc
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Key Trends |
Description |
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Lower Costs and Higher Yields |
LFP battery producers are currently concentrating mostly on minimizing operating costs and boosting production. Increasing demand for LFP batteries for electric vehicles, clean energy, and industrial production is motivating manufacturers to increase production efficiency and increase production capacity. In addition, since the current supply has not fully met the market demand, production capacity has become the key to obtaining a higher market share and enhancing the competitiveness of enterprises in the future. Production costs are also an important factor in market competitiveness. Therefore, many manufacturers in this industry are committed to reducing production costs while increasing production capacity, seizing the market. This will also drive the increase in production capacity of the entire market. LFP Manufacturing capacity(GWh):
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LFP Battery Recycling has Become a New Trend |
The lithium battery recycling market is vast. With the widespread use of LFP batteries, recycling them will become a new market trend. At present, the battery life of the power battery is about 5-8 years, and as the early new energy vehicles enter the scrapping period, it is foreseeable that the number of scrapped batteries will increase significantly in the next few years. Scrapped power batteries contain a large number of valuable metals, which are discarded and disposed of at will, which not only causes a great waste of cobalt, nickel, manganese, lithium and other resources, but also seriously pollutes the environment. The power battery recycling technology is basically mature and the methods can be divided into echelon utilization and recycling. Moreover, power battery recycling has enormous economic and strategic value. |
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Wider Range of Applications |
Electric vehicle (EV) and energy storage systems (ESS) battery sectors use a variety of battery technologies and chemistries. These sectors have expanded rapidly over the past decade and OEMs have settled on a few lithium-ion chemistries which now make up the majority of installations. Lithium-iron-phosphate (LFP) is poised to overtake lithium-manganese-cobalt-oxide (NMC) as the dominant stationary storage chemistry within the decade, growing from 10% of the market in 2015 to more than 30% in 2030. In addition, LFP batteries are increasingly used in consumer electronics. With the overall improvement of people's living standards and the popularity of various consumer electronic products, this industry will create more application scenarios for LFP batteries in the future. |
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More Fierce Market Competition |
In the future, as more and more companies compete for market share, the market competition for LFP will become more intense. The top 15 producers in 2021 alone got 200GWh of new production lines running and by the end of last year cumulative manufacturing capacity reached 600GWh. The Asia-Pacific region will therefore continue to lead the market, which globally has announced 5,500GWh of manufacturing capacity to come online by 2030 at 300 facilities, but Europe and the US will have begun to eat into its share by then. According to Wood Mackenzie forecast, while 90% of the world’s battery manufacturing was in the Asia-Pacific region, and most of that in China, by 2030 that share will have fallen to 69%. Europe will have a 20% share at that stage The rapid upgrading of products also brings challenges to the company's R&D ability and production capacity, which is also an important factor to enhance competitiveness. |
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Lithium iron manganese phosphate (LFMP) |
Lithium iron manganese phosphate (LFMP) is becoming a new hot spot in the power battery track. Lithium iron manganese phosphate is a mixed product of lithium iron phosphate and lithium manganese phosphate, which has the same structure as lithium iron phosphate, and is an orderly and regular olivine structure. Therefore, lithium manganese iron phosphate and lithium iron phosphate have the same advantages of low cost, high safety performance, high thermal stability, no spontaneous combustion after needle punching and overcharging, long life, safety and no risk of explosion, and at the same time make up for the advantages of iron phosphate Lithium's short board. The relevant report of Caixin Securities also mentioned that the lithium manganese iron phosphate battery can support the battery life of electric vehicles up to 700 kilometers. Under the premise of ensuring safety, the energy density of the battery will be further improved compared with lithium iron phosphate. According to statistics, NIO, CATL, BYD, Zhongxinhang, Funeng Technology, Gotion High-tech, Honeycomb Energy, Phylion, Ruipu Lanjun, Hengchuang Nano, Defang Nano and other upstream and downstream enterprises in the automotive industry chain are all We are increasing the layout of the lithium manganese iron phosphate track. According to industry insiders, lithium manganese iron phosphate batteries are expected to be mass-produced in the second half of 2023 and begin to be used in passenger cars. |
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Lithium iron phosphate battery expands leading edge |
According to the data of the China Automotive Power Battery Industry Innovation Alliance (hereinafter referred to as the "Alliance"), in China, the installed capacity of ternary batteries will be 110.4GWh in 2022, accounting for 37.5% of the total installed capacity, a year-on-year increase of 48.6%; lithium iron phosphate batteries The installed volume was 183.8GWh, accounting for 62.4% of the total installed volume, a year-on-year increase of 130.2%. In contrast, ternary batteries and lithium iron phosphate batteries accounted for 48.1% and 51.7% of the installed volume in 2021; the proportions in 2020 were 61.1% and 38.3%. It can be seen that after the lithium iron phosphate battery has overtaken the ternary battery in 2021, its leading advantage will be further expanded in 2022. In addition, judging from the year-on-year increase in the installed volume, lithium iron phosphate batteries are much higher than ternary batteries, which means that the market share of lithium iron phosphate batteries is likely to continue to increase in the future. In fact, this sign can already be seen from December 2022, when the market share of lithium iron phosphate batteries was as high as 68.3%, close to 70%, while ternary batteries dropped to 31.6%. In fact, not only Chinese car companies, but more and more multinational car companies are also beginning to favor lithium iron phosphate batteries. For example, Ford recently announced that it will build a lithium iron phosphate battery factory in the United States, and Stellantis plans to launch a lithium iron phosphate battery factory in Europe. For electric vehicles with lithium iron batteries, General Motors also said it is exploring the possibility of using lithium iron phosphate batteries to reduce costs. |
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