Lithium iron phosphate (LFP) material is the earliest power battery technology route adopted in the development of new energy vehicles in my country. Its main advantages are abundant raw material resources, low cost, good battery safety, and cycle performance, and its main disadvantage is battery-specific energy low. In the past few years, the installed capacity of ternary batteries has increased from 23% in 2016 to 62% in 2019, while the installed capacity of lithium iron phosphate batteries has decreased from 72% to 32%.
However, in November this year, the cumulative proportion of lithium iron phosphate batteries reached 40%, and the installed capacity in November reached 4.71 GWh, which was a significant increase from the previous October, with an increase of 95.%% and a market share of 44.45%. On December 30, lithium iron phosphate producers rose 1,000 yuan per ton, an increase of nearly 3%. Supply is tight, and the market is in short supply.
Subsidy effect weakens, low-cost lithium iron phosphate regains competitiveness
New energy vehicle subsidies have requirements for energy density and cruising range. The higher the energy density and the longer the cruising distance, the higher the corresponding subsidy. Under the guidance of the subsidy policy, the penetration rate of high-energy-density ternary batteries has increased rapidly, and the lithium iron phosphate in passenger cars has quickly fallen. Compared with 2018, the subsidy policy announced in March 2019 has dropped significantly, and the installed capacity of power lithium iron phosphate batteries has recovered in 2019. In the field of new energy special vehicles and buses, lithium iron phosphate batteries have begun to heat up, and the installed capacity has greatly increased. On April 23, 2020, the four ministries and commissions continued to promulgate policies to extend the subsidy policy period to the end of 2022, reducing by 10%, 20%, and 30% from the previous year respectively from 2020 to 2022. At present, the maximum subsidy for a single vehicle in passenger cars has dropped by nearly 60,000 yuan compared with 2018, and the subsidy effect has been significantly weakened. In the post-subsidy era, the market's vision will return to cost-effectiveness, and the cost-effective lithium iron phosphate route will regain competitiveness.
Since 2020, the installed rate of lithium iron phosphate lithium batteries has recovered, and the rate of passenger cars has increased significantly. Data show that from January to July 2020, the installed capacity of lithium iron phosphate was 6.69GWh, accounting for 29.4%, which was lower than 33.8% in 19 years. However, according to monthly data, the installed capacity of lithium iron phosphate in July was 1.7 GWh, accounting for 34.56% of the installed capacity of power batteries, and the overall proportion is on the rise. Among the installed capacity of lithium iron phosphate from January to July 2020, passenger car installed capacity was 16.3%, which was higher than the 12.2%% in 2019; in July, the passenger car’s installed capacity of lithium iron phosphate accounted for the highest proportion. Up to 57%, the share of passenger cars has increased to 20.72%. In passenger cars, lithium iron phosphate accounted for 7.2% from January to July 2020, up from 6.5% in 2019, and the proportion of lithium iron phosphate increased to 10.8% in July. Overall, the recovery trend of lithium iron phosphate in passenger cars has emerged. With the delivery of several explosive models of lithium iron phosphate in the second half of the year, this proportion will continue to grow.
Under the joint promotion of policies and new energy vehicle products, global electric vehicle sales are expected to reach 2.8 million by 2020, an increase of approximately 30% year-on-year. Among them, China and Europe are the two largest markets in the world, accounting for 1.25 million and 1.2 million vehicles respectively. Looking forward to 2021, with the further increase in high-quality supply, global electric vehicle sales will reach 4.7 million units, an increase of approximately 68% year-on-year. Due to the reduction of carbon dioxide emissions, subsidy policies, and the accelerated electrification of traditional car factories, the European market is expected to sell 2 million vehicles, an increase of 67% year-on-year. In China, with continuous breakthroughs in power batteries, coordinated development with autonomous driving, and changes in consumer attitudes, sales in the domestic market are expected to reach 2 million vehicles, an increase of about 60% over the previous year.
Standby power supply for communication base stations: lead-acid ends, iron-lithium debuts
Since the development of the mobile communication industry, lead-acid batteries have been favored by the field of communication base stations due to their mature technical foundation, high-cost performance, better stability, and perfect back-end processing, occupying more than 90% of the market. As the cost of lithium iron phosphate batteries continues to decline, the backup power of lead-acid batteries is threatened. From a price point of view, the price of lithium iron phosphate batteries is twice that of lead-acid batteries, but from a cost point of view, the life cycle cost of iron-lithium batteries in the field of basic energy storage is much higher than that of lead-acid batteries. Therefore, we believe that the replacement of lead-acid batteries is an inevitable trend in the development of the industry. With the significant increase in power consumption of 5G base stations, the cost of electricity has also risen sharply. Base stations have strong demand for peak and frequency modulation. The lower cycle life and slower charging speed of lead-acid batteries cannot meet the needs of the 5G era, while iron-lithium batteries In this regard, bring great economic efficiency to 5G base stations.
5G base station energy storage provides a deterministic increase for lithium iron phosphate batteries. Previously, information from the Ministry of Industry and Information Technology indicated that it is expected that the number of new 5G base stations this year will be 680,000, and 7.6 million base stations will be completed by 2025. If the country completes 7.6 million 5G base stations, using iron-lithium batteries as a backup power source and peak-shaving and valley-filling, the annual electricity expenditure will be reduced by 19.4 billion yuan compared with the use of lead batteries. In the face of huge pressure on electricity bills, the importance of iron-lithium batteries as coordinating base station high-frequency peaks and valleys have been highlighted. With the layout of 5G base stations, assuming that the proportion of lithium iron phosphate batteries used from 2020 to 2022 is 50%, 70%, and 80%, respectively, the demand for lithium iron batteries in the next three years will be 7.2GWh, 14.8GWh, and 22.1, respectively. GWh.
From power to base station, the future of iron-lithium is comparable to the stars and the sea
From power to base stations, the logic of the recovery of power batteries can be proved by iron-lithium. It also plays an increasingly important role in the energy storage of communication base stations in the 5G era. Iron-lithium is in the uphill stage, but this is not iron. The upper limit of lithium. As the cost of lithium batteries continues to decline, iron-lithium batteries are expected to completely open up supporting space in the field of large-scale energy storage and are widely used in various fields. In the future, the market for iron-lithium batteries is unlimited, comparable to the stars.
The pattern of the lithium iron phosphate industry is stable in 2019, and the industry is trending towards concentration
Due to the long-term oversupply in the industry in the past, product profits have gradually declined. Leading companies have gradually gained the upper hand in the market through economies of scale, customer loyalty, and historical experience, and market concentration is on the rise. The domestic lithium iron phosphate market is basically stable and highly concentrated. After a round of reshuffle, the concentration of the lithium iron phosphate battery market has increased significantly. The market share of the top three markets has increased from 76.8% in 2017 to 84.7%. It has now formed a dominated by CATL, Guoxuan Hi-Tech, and BYD First-tier echelon.
