The entire battery industry chain, upstream and downstream, seems to be moving closer to lithium iron phosphate.
Mercedes-Benz is considering the use of ferrophosphorus batteries for entry-level models. Tesla is frequently exposed to large ferrophosphorus orders. Overseas battery companies have deployed lithium iron phosphate batteries. Material manufacturers are accelerating production expansion. The installed capacity of lithium iron phosphate continues to rise. This series of actions seems to be All are sending us a signal: the market for lithium iron phosphate batteries is getting bigger and bigger.
Why are OEMs, battery companies, materials companies, and the current market performance so optimistic about lithium iron phosphate? How long can this confidence be maintained? According to this trend, what kind of supply pattern will ternary and iron-lithium form?
Why is the acceptance of lithium iron phosphate batteries increasing?
There are two reasons why a technological route brings more and more confidence to the market. One is that it can maximize market demand with the safest and lowest cost, and the other is that the cost of competitors has become higher and the difficulty of obtaining it has become higher. Two factors acted, so everyone looked at the lithium iron phosphate battery in unison.
After experiencing negative events such as fires and explosions, car companies, battery factories, and the public are becoming more and more vigilant about electric vehicles. When the market is not yet fully mature, car companies are certainly unwilling to burn out the little enthusiasm that the public has left for new energy vehicles. As a result, "safety" has become a highlight of high-profile publicity by battery factories and automakers. Lithium iron phosphate battery is the first choice due to its high stability.
In addition to safety, cost and energy density are also factors that OEMs must weigh.
From the point of view of energy density, although the theoretical energy density of lithium iron phosphate batteries is much worse than that of ternary lithium batteries, the OEM does not start with the energy density indicator to determine a battery but gives the battery life, Reference indicators such as cost, weight, size, etc., are handed over to the battery factory for design and production. Therefore, as far as the battery factory is concerned, the energy density is sufficient. When this condition is met, the battery factory must give priority to lithium iron phosphate batteries with low cost and high thermal stability.
The price of raw materials has generally risen this year. From the beginning of July to November 4th, the price increase of the cathode materials of each system is basically about 40%. The electrolyte has also increased to a certain extent, and the price of lithium iron phosphate materials has increased by 65.71%. , But the unit price is still very obvious compared with the ternary cathode material.
The battery factory itself is under pressure to reduce costs. Nowadays, raw material prices have risen due to uncertain external factors. Moreover, the resources of nickel, cobalt, and manganese, especially cobalt, in the cathode materials are scarce and many are distributed abroad, although domestic batteries The factory is also trying to control scarce resources in various ways, after all, this kind of behavior has a large investment, and ordinary enterprises cannot move. Therefore, for many small and medium-sized battery companies, it is necessary to obtain materials and resources from the wave of price increases. It is difficult to guarantee the cost.
Based on these factors, many car companies choose to use lithium iron phosphate batteries. Although the highest monomer energy density of lithium iron phosphate that has been installed is only 185Wh/kg, different levels of models such as Han, Model Y, Aion Y, Haomao, and Hongguang MINI are all equipped with it. This also shows from the side that although the actual energy density cannot be as high as a ternary battery, it can still meet the needs of different levels of vehicles. And with the application of CTP and blade batteries, the energy density limit of lithium iron phosphate batteries will become smaller and smaller.
Therefore, while meeting the basic requirements of safety, battery life, and material controllability, lithium iron phosphate batteries also take into account the advantages of high cycle times, high consistency, and low cost, and it is of course to harvest more and more market shares.
With the gradual opening of the market in the fields of energy storage and ships, the market for lithium iron phosphate batteries will also expand. But is this expansion endless? Will it squeeze the market for ternary lithium batteries?
To what extent can the lithium iron phosphate battery market expand? What kind of supply pattern will be formed in the future?
According to the installed capacity, it is obvious that the installed capacity of lithium iron phosphate batteries has increased significantly from 2019 to 2020. There are more and more car companies and battery factories joining the lithium iron phosphate battery camp, so iron phosphate The installed capacity of lithium batteries is increasing.
If the number of car companies and battery factories that join the lithium iron phosphate camp is the most direct factor affecting the installed capacity, to what extent the market can expand, the first thing to consider is the layout of the car companies and battery factories on the lithium iron phosphate market.
From the perspective of car companies, a very obvious phenomenon: lithium iron phosphate battery models are obviously increasing, many models have begun to push lithium iron phosphate versions, car companies have more models of lithium iron phosphate versions, and lithium iron phosphate in newly declared models There are more battery models than Sanyuan models.
In addition, BYD, Hyundai Motor, Tesla, Xiaopeng Motors, Mercedes-Benz, and other auto companies all have plans to replace lithium iron phosphate batteries, which is a new incremental part.
Looking back further, the scale of expansion projects related to lithium iron phosphate batteries by battery factories and material factories this year is also very large, which can cover many years of production capacity in the future. Of course, there are energy storage, ships, two-wheelers, and commercial vehicles. Some of the applications, but the largest application should be the passenger car field.
To digest so many increments, the market for lithium iron phosphate will definitely become larger and larger, there is no doubt about this. However, will it squeeze the market for ternary lithium batteries?
Taking the passenger car market as an example, the installed capacity of lithium iron phosphate will account for from 4.83% in 2019 to 35.41% in 2020, and then to 38.04% in the first 9 months of this year. From this turning point, we can also see that the increase in raw material prices caused by the epidemic is The market switch to lithium iron phosphate is a big factor. However, compared with last year, the installed capacity of lithium iron phosphate batteries this year has stabilized. From a trend point of view, it should be difficult to increase explosively.
Assuming that the price of ternary lithium battery materials returns to the previous level, will the installed capacity turn up?
First of all, as for the batteries that have been replaced with lithium iron phosphate, since lithium iron phosphate batteries can already meet the needs of this batch of models, there is no need to choose higher-cost ternary lithium batteries. Secondly, a batch of models is preparing to add lithium iron phosphate. Version or replace with lithium iron phosphate battery. From these two perspectives, the installed capacity of lithium iron phosphate batteries will only increase.
However, we cannot rule out the fact that consumers are increasingly demanding battery life. Although Guoxuan High-Tech stated that the 210Wh/kg lithium iron phosphate battery will be mass-produced by the end of the year, it is still far below the current energy density of the ternary lithium battery.
Therefore, in the long run, we believe that ternary lithium batteries and lithium iron phosphate batteries will have their own advantages. For models with a relatively lower model level, lithium iron phosphate batteries have more advantages, but they have higher endurance requirements and higher levels. The ternary lithium battery has more advantages. However, all this depends on the current status of the application of these two battery technologies and the needs of specific vehicle models by battery factories.
