By 2028, lithium iron phosphate (Lifepo4 battery) will replace nickel manganese cobalt (NMC) as the dominant force in the field of chemical batteries, and by 2030, the global market demand will exceed 3000GWh.
This comes from the latest analysis of the lithium-ion battery manufacturing industry by Wood Mackenzie.
In this decade, the two manufacturers planning to increase capacity the most are China's CATL (CATL) and South Korea's LG.
CATL alone plans to achieve an annual online production capacity of 800GWh by 2030.
In 2021 alone, the new production lines of the top 15 companies have invested 200GWh, and the cumulative production capacity reached 600GWh by the end of last year.
To date, major Chinese manufacturers have announced plans to build more than 3,000GWh of capacity. Therefore, Asia Pacific will continue to lead this market. The world has announced that 300 factories will have a capacity of 5,500GWh by 2030, but by then Europe and the US will begin to eat away at this market share.
While 90% of the world's battery manufacturing is in the Asia-Pacific region, most of which is in China, by 2030 this proportion will drop to 69%. Wood Mackenzie predicts that Europe will have a 20% market share by then.
That forecast is broadly in line with the latest data from another analyst firm, Clean Energy Associates, which said China accounted for about 75 percent of global battery capacity in 2020, falling to 66 percent in 2030.
Another agency, Benchmark Mineral Intelligence, estimates that by 2030, 18 different producers will build 27GWh plants in Europe, accounting for 14% of the total global market.
Like Wood Mackenzie, the Clean Energy Association (CEA) noted that the competition between (Lifepo4 battery) batteries and NMC batteries is heating up. Both companies noted that EV makers are beginning to accept the trade-off of lowering energy density when adopting LFP batteries due to the advantages of safety, long life and low cost.
Lithium iron phosphate (Lifepo4 battery) has been embraced by stationary battery energy storage systems (BESS), where energy density is often not a decisive factor.
Among the batteries sold by Chinese manufacturers, LFP outsold NMC, and its market share has grown throughout the year: of the 100GWh lithium batteries used in EVs and ESS, 44% are NMC, and most of the rest are LFP.
Wood Mackenzie also said that the advantages of LFP compared to NMC's more mature market technology make it an attractive option for power and energy applications.
The group noted that supply chain issues plaguing the battery market are unlikely to ease in 2022, especially as demand for electric vehicles rises due to rising oil prices and shortages of raw materials. However, analysts at Wood Mackenzie said more new factories are expected to be announced this year.
Nearly 80% of demand for lithium-ion batteries comes from the electric vehicle market, said Jiayue Zheng of consultancy Wood Mackenzie, adding that zero-emission transport policies introduced in response to rising fuel costs are "resulting in demand for lithium-ion batteries. Demand has soared."
Zheng said the market had already experienced shortages last year, driven by rising demand and rising raw material prices.
The Clean Energy Association (CEA) predicts that by 2030, stationary energy storage will account for about 13% of the total lithium battery market demand. Therefore, addressing this will require strategies to compete with EVs for battery supply, or to diversify technology.
Sodium ions are an example. CATL, one of the first companies to mass-produce LFP cells and a major supplier to the BESS industry, supports sodium-ion technology as a possible alternative and is working to commercialize it.
Yesterday, Sweden-based sodium-ion battery technology company Altris said European battery-making startup Northvolt was among the group in a €9.6 million ($10.6 million) Series A funding round. India's major clean energy group Reliance New Energy has also invested in sodium-ion, buying UK-based sodium-ion battery company Faradion.
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