Wood Mackenzie's global energy storage research team released the latest research report Can LFP technology retain its battery market share? ("Can lithium iron phosphate batteries maintain its market share in lithium battery energy storage system applications?"). Wood Mackenzie’s latest analysis shows that lithium iron phosphate batteries (LFP) is expected to replace nickel-manganese-cobalt ternary lithium batteries (NMC) as the mainstream technology route for lithium battery energy storage system applications in the next ten years. 10% increase to more than 30% in 2030.
At this stage, most lithium battery energy storage systems have a battery life of 4 to 6 hours. As far as the current battery performance is concerned, beyond this period of time, the economics of lithium batteries will get worse and worse, and the rate of return will decrease.
The growing demand for lithium batteries in the electric vehicle and energy storage markets has continuously promoted the innovation of lithium battery technology routes, including improving battery cathodes, anodes, and electrolytes to develop better performance lithium batteries.
Since 2010, the market demand for electric vehicles has grown rapidly, which has reduced the cost of lithium batteries by more than 85%. Historically, the energy storage market has mainly used nickel-manganese-cobalt ternary lithium batteries. Especially at the end of 2018 and the beginning of 2019, the demand for energy storage increased sharply, resulting in a shortage of nickel-manganese-cobalt ternary lithium batteries. At the same time, there is still a supply of lithium iron phosphate batteries on the market, whose production capacity mainly comes from China.
Due to the increase in the delivery time of nickel-manganese-cobalt ternary lithium batteries and the slower price decline, lithium iron phosphate batteries began to seize market share at a lower price, whether in power applications or energy applications. Preferred one.
In the next few years, the demand for lithium batteries in the electric vehicle and energy storage markets will continue to show rapid growth. Due to different application scenarios, the performance requirements of the two lithium batteries are different. To this end, battery manufacturers will begin to innovate their products and provide targeted products for market segments.
For the energy storage market, factors such as battery life and the charge-discharge rate will take precedence over energy density. Cost and safety are still the primary considerations for battery suppliers in a variety of applications.
In the next ten years, the demand for lithium batteries for electric vehicles will continue to occupy the largest share of the global demand for lithium-ion batteries. As the electric vehicle and energy storage markets begin to take off, the share of demand for lithium batteries from portable electronic products will drop significantly from 26% in 2020 to 6% in 2030. Wood Mackenzie believes that lithium iron phosphate batteries will continue to be popular in the Chinese electric vehicle market, and then enter the global passenger electric vehicle field. It is estimated that by 2025, lithium iron phosphate batteries will account for more than 20% of installed capacity in the electric vehicle industry.
The increase in cell energy density and the application of module removal technology (CTP) are important factors for LFP's growing competitiveness in the passenger electric vehicle market. The use of LFP can not only reduce costs and improve battery safety but also solve the problem of battery manufacturers' limited supply of cobalt and nickel.
