An older, cheaper and safer battery technology that already dominates China’s electric vehicle industry is now poised to revolutionize battery manufacturing worldwide and boost EV sales in the United States – if global lithium supplies remain stable.
A slew of lithium iron phosphate (LFP) chemistry patents expiring in 2022 could change the face of battery manufacturing in the US and Europe.
China has owned the market for nearly a decade thanks to an agreement with patent holders – a consortium of universities in the US and Canada – that allows Chinese manufacturers to use it to supply local markets. Meanwhile, manufacturers outside of China have focused on developing other lithium-ion technologies to power their EVs, as their higher energy density translates into greater range on the road.
LFP already represents 17% of the global EV market and represents a potential path for the mass market, according to the AlixPartners 2022 Global Automotive Outlook released Wednesday.
That’s because universal access to patents, coupled with rising battery raw material prices, is pushing many automakers to see the benefits of iron-based batteries. For starters, they cost less, don’t use scarce resources like cobalt and nickel, and are less likely to catch fire.
There have been warnings that an impending shortage of lithium supplies could lower the global EV sales forecast to 25 million EVs by 2030, from an expected 40 million, according to a report Tuesday from the Advanced Propulsion Center, a partnership between the UK government and automakers. †
That doesn’t seem to stop the momentum towards LFPs, though. Even if a lithium bottleneck slows production, battery chemistry will remain easier to produce than the NMC (nickel-manganese-cobalt) that the industry currently prefers, since those metals are also scarce.
The same organization predicted that a quarter of EVs built in Europe will use LFP. Industry analysts have also become optimistic about the prospect of LFPs, predicting that the iron-based batteries will power entry-level and cheaper vehicles, while nickel-based cells will be used for more expensive and performance-oriented cars.
According to Edgar Faler, senior industry analyst at the Center for Automotive Research, LFP batteries could play a large role in the 250 battery electrical nameplates coming to the US by 2030. The chemical industry also fits in well with the growing demand for light and medium-duty commercial vehicles that can deliver goods in urban areas.
“In the near future, a number of different chemistries will compete to become the chemistry of choice,” Faler said.
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