So. Jun 16th, 2024

The Lithium Iron Phosphate Batteries market size is forecast to reach US$ 12.3billion by 2027, growing at a CAGR of 5.6% from 2022 to 2027. The lithium iron phosphate (LFP) battery is a type of lithium-ion battery using lithium iron phosphate(LiFePO4) as the cathode material, LiFePO is a natural mineral of the olivine family (triphylite) and a graphitic carbon electrode with a metallic backing as the anode. These batteries have lower cost, high safety, low toxicity and long cycle life. lithium iron phosphate batteries find a number of roles in automotive, backup power and other utility applications such as smartphones, laptops, flashlights, radio-controlled models, carbon nanotubes, carbon electrodes, olivine, industrial sensor systems and others. Factors such as growing research in carbon nanotube-modified LFP batteries, the rise in demand for green solutions such as electric vehicles and renewable energy, and the growing need for long-life batteries and high-temperature sustaining batteries lead to the growth of this market. However, technical limitations such as low voltage and low energy density restrain the lithium iron phosphate batteries market growth. In 2020, according to the China Association of Automobile Manufacturers (CAAM), China produced 9.56-gigawatt hours (GWh) of LFP battery power in the first two months of 2021, accounting for 44.3% of the total battery output. Hence, the largest market share in the lithium iron phosphate batteries market is acquired by China.

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Lithium Iron Phosphate Batteries Market Report Coverage

The report: “Lithium Iron Phosphate Batteries Industry Outlook — Forecast (2022–2027)” by IndustryARC, covers an in-depth analysis of the following segments in the Lithium Iron Phosphate Batteries industry.

By Type: Portable, Stationary.

By Package: Battery system, Battery Module, Cells.

By Power: 0–12V, 13–24V, 25–48V, 49–96V, Greater than 96V.

By End-user: Automotive (Electric cars, Hybrid cars, Commercial vehicles, Others), Industrial equipment, Power & Energy (Electric cars, Hybrid cars, Commercial vehicles, Others), Electronics (Consumer electronics, Wearable electronics), Aerospace, Military & Defense, Others.

By Geography: North America (U.S., Canada, Mexico), Europe(U.K, Germany, France, Italy, Spain, Others), APAC (China, Japan, South Korea, India, Australia, Others), South America (Brazil, Argentina, Others), RoW (Middle East, Africa).

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Key Takeaways

  • The battery module segment held the largest Lithium Iron Phosphate Batteries market size in the Lithium Iron Phosphate Batteries market segmented by packaging, in 2021This is owing to large scale demand in electric vehicles as well as rising demand of customizable and integrated battery modules.
  • The automotive segment held the largest Lithium Iron Phosphate Batteries market size in Lithium Iron Phosphate Batteries market by end-user, in 2021. This is attributed to the growing use of electric or hybrid vehicles, the need for environment-friendly technologies in the automobile sector and the long cycle life of the batteries.
  • APAC (Asia-Pacific) market held the largest market share of 42%, in 2021. This is due to ample availability of raw materials for batteries, government projects to boost environment-friendly solutions and an increase in the production of renewable energy and its storage.
  • The factors such as government initiatives for eco-friendly technologies rise in demand for electric vehicles and wearable electronics applications, the growing need of long-life batteries and high temperature-sustaining batteries result in the growth of the lithium iron phosphate batteries market.

Lithium Iron Phosphate Batteries Market Segment Analysis — by Packaging

The Lithium Iron Phosphate Batteries market by type of system has been segmented into battery system, battery module, and cells. The battery module segment held the largest share of 45%, in 2021. This is owing to ease of replacement and customization of cell packs, integration with smart monitoring systems, radio-controlled models, carbon nanotubes, carbon electrodes, olivine and high battery cell energy density. A battery assembly put into a frame by combining a fixed number of cells to protect them from external shocks, heat or vibration is a ‘battery module’. For example, the energy supply for campers, trucks, motor homes and boats where weight is important is given by lithium iron phosphate batteries modules of 12.5V usually integrated with a battery management system (BMS). Another example of High Capacity Lithium Iron Phosphate batteries are designed for a broad range used in cabinet, container or building applications and can be customized as required. Thus, the growing demand for customized battery modules and integrated battery modules for monitoring the system is driving the growth of the battery modules segment. In March 2021, Blue Planet Energy announced the launch of its Blue Ion HI, a safe, hassle-free energy storage solution for homes, businesses and community resilience projects. It is engineered for streamlined installation and its proprietary racking system allows installers to easily place and stack the lithium ferrous phosphate (LFP) battery modules and to quickly expand capacity in units of 8, 12 or 16 kWh as required. Thus, the growing demand for battery modules is driving the growth of Lithium Iron Phosphate batteries.

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Lithium Iron Phosphate Batteries Market Segment Analysis — by End-user

The Lithium Iron Phosphate Batteries market by end-user has been segmented into automotive (electric cars, hybrid cars, commercial vehicles, others), industrial equipment, power & energy (electric cars, hybrid cars, commercial vehicles, others), electronics (consumer electronics, wearable electronics), aerospace, military & defense, others. The automotive segment held the largest share of 35%, in 2021. This is attributed to the growing awareness of clean energy solutions in automobiles, the need for efficient and long-life batteries in electric or hybrid vehicles and a wide range of stable working temperatures. Lithium Iron Phosphate Batteries are rechargeable, thermally and chemically stable hence less prone to explosions or fires, free from cobalt emissions and have long battery life. As a result, they are widely used in the automotive sector for electric and hybrid vehicles which boosts the lithium iron phosphate batteries market. In 2021, the American electric car maker Tesla announced that it will adopt lithium iron phosphate batteries in its standard-range vehicles. In its third-quarter earnings report, the company clearly stated that we are shifting to Lithium Iron Phosphate (LFP) battery chemistry globally. Many other automobile companies such as Hyundai, BMW and Porshe have also initiated a process to switch to these batteries. This rapid surge in demand for lithium iron phosphate batteries is driving the growth of this market.

Lithium Iron Phosphate Batteries Market Segment Analysis — by Geography

The Lithium Iron Phosphate Batteries market by geography is segmented into North America, Europe, Asia-Pacific (APAC), South America and the rest of the world (RoW). APAC (Asia-Pacific) held the largest Lithium Iron Phosphate Batteries market share with 42%of total market size, in 2021. This is majorly due to the availability of raw materials at effective costs, supportive government initiatives to promote environment-friendly solutions and the growing use of renewable energy and the need for its storage. In 2021, according to China Centre for Information Industry Development (CCID) white paper published, China has now been the world’s largest lithium battery consumer market for five consecutive years the global lithium-ion battery market reached 545GWhand China accounted for more than half of the total. The white paper also shows that the country’s southwestern regions have the richest mineral resources such as lithium and phosphorus and the phosphate rock reserves in Yunnan, Guizhou and Sichuan account for more than 40% overall. These batteries are mainly utilized in radio-controlled models, carbon nanotubes, carbon electrodes, olivine, electric vehicles, energy storage facilities, 5G network base stations and smartphones in China. Thus, growing research and production facilities in Asian countries is promoting market growth.

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Lithium Iron Phosphate Batteries Market Drivers

The growing adoption of green technological solutions in automobiles and the rise in government initiatives for the promotion of clean energy are the factors driving the growth of this market

Lithium Iron Phosphate Batteries are based on green and clean technological development mainly used in the growing segment of electric vehicles (EV) and renewable energy storage systems. As they do not contain nickel or cobalt, which are polluting elements in the other battery systems, there is a rise in the usage of LFP batteries. In October 2021, according to The Elec report, Hyundai Motor has begun the development of electric vehicles powered by lithium iron phosphate batteries to launch outside of China. Hyundai Motor used batteries from SK Innovation and LG Energy Solution, which use nickel cobalt oxides in their batteries instead of LFP. Thus, many leading automobile manufacturers of electric vehicles such as Tesla, BMW, Porshe and others are adopting lithium iron phosphate batteries. According to a Wood Mackenzie report, about 80% of lithium-ion battery demand comes from the EV sector, with zero-emissions transportation laws pushed out in response to rising fuel costs shall drive demand for lithium-ion batteries. In April 2020, Demand for lithium iron phosphate batteries in the new energy vehicle market, which enjoy more cost advantage as compared to high-nickel ternary batteries, will likely increase with support from the latest 2020 NEV subsidy policy, under which only passenger cars costing less. Thus, the growing adoption of Lithium Iron Phosphate Batteries in electric vehicles and rising government emission norms is driving the demand for LFP batteries which leads to the growth of this market.

The need for replacement of conventional batteries. The demand for long life and wide range of working temperature for batteries is propelling the lithium iron phosphate batteries market growth.

Lithium iron phosphate batteries are rechargeable and cobalt-free which makes them environmental-friendly. They have longer cycle life than other lithium-ion batteries. Under most conditions, it supports more than 3,000 cycles and under optimal conditions, it supports more than 10,000 cycles. This is because lithium iron phosphateLFP cells experience a slower rate of capacity loss along with good safety characteristics of Lithium iron phosphate LFP batteries. One important advantage over other lithium-ion chemistries is thermal and chemical stability, which improves battery safety.LiFePO4 is an intrinsically safer cathode material compared to others available in conventional batteries. Lithium iron phosphate is highly resilient during oxygen loss, which typically results in an exothermic reaction in other lithium cells. As a result, Lithium iron phosphate cells are harder to ignite, reducing the resulting accidents These batteries do not decompose at high temperatures and hence can sustain a wide range of temperatures Lithium Batteries have an operating temperature range of 32°F (0°C) — 131°F (55°C). As a result, all these benefits of Lithium iron phosphate batteries are used on a large scale in various industries. In May 2022, Shenzhen Kstar Science and Technology (Kstar) announced the launch of a new residential hybrid storage system at the Smarter E event in Munich, Germany. The platform integrates its own PV inverter tech and lithium-ion storage solutions by China’s Contemporary Amperex Technology(CATL). It is also stated that Keeping the same cell type LFP (without cobalt) with better safety performance, the battery model is mainly utilized in low voltage systems, which also strengthens its ability to handle the harsher environment. Thus, growing efforts are made to improve the output of lithium iron phosphate batteries, boosting market growth.

Lithium Iron Phosphate Batteries Market Challenges

The technical limitation of low energy density, low voltage and flammable risks acts as a roadblock for the Lithium Iron Phosphate batteries market

Energy density is a measure of the amount of energy stored. In the case of batteries, it is an important parameter to map its charging ability and storage capacity. Lower energy density leads to less battery life, faster discharge and a high I/O (input/ output) ratio. The energy density of a new Lithium Iron Phosphate (LFP) battery is 14% lower than that of a new LiCoO2 battery Lithium-ion rechargeable battery with LiCoO2 has the highest energy density of 390 Wh/l. Some of them also have a lower discharge rate than lead-acid and other conventional batteries. Since the energy available in a battery is a product of capacity times voltage, an LFP cell of a given cathode thickness stores less energy. There are also risks of damaging the batteries while charging through excessive charging voltages, temperature-based voltage compensation, equalization attempts or continuous trickle charging. The LFP cells must be at least balanced initially before the pack is assembled and a protection system also needs to be implemented to ensure no cell can be discharged below a voltage of 2.5 V or severe damage will occur in most instances, due to irreversible decomposition to Fe3O4. LFP batteries are not exempt from flammable risks as they share the same structure as lithium-ion batteries. Anodes and cathodes are located on each side with separators in the middle and both kinds of batteries are filled with a flammable electrolyte solution. In May 2020, a Tang EV from Chinese manufacturer BYD cell caught fire when it was parked along a road in Shenzhen. However, they are very rare but pose a significant risk to property and lives. Hence, the growth of the lithium iron phosphate batteries market is restricted owing to these risks

Lithium Iron Phosphate Batteries Membrane Industry Outlook

Product launches, acquisitions and R&D activities are key strategies adopted by players in the Lithium Iron Phosphate Batteries industry. The top 10 companies in the Lithium Iron Phosphate (LFP) industry include Cegasa Portable energy, A123 Systems, BYD Company, K2 Energy systems, EVE Energy Co. Ltd., Contemporary Amperex Technology Co. Ltd. (CATL), Panasonic Industry, Energport, Samsung SDI, GuangzouTycorun energy

Recent Developments:

In May 2022, Natural Battery Technologies announced the launch of automotive safe batteries using Lithium Iron Phosphate (LFP), Advanced Cell Chemistry Carbon based batteries for electric vehicles and Inverter Lithium Batteries for home and commercial use. They are also working on other applications including UPS (Uninterrupted Power Supply), Telecom Tower Energy Storage and GIS Backup batteries. Thus, expanding the usage of products in various industry verticals shall help the company to gain a significant market share

In May 2022, Reliance New Energy Limited (RNEL), a wholly-owned subsidiary of Reliance Industries, announced the acquisition of all assets of Lithium Werks BV, a provider of cobalt-free Lithium Iron Phosphate batteries, for $61 million, including funding for future growth. The acquisition is expected to strengthen Reliance’s materials supply chain for large-scale manufacturing and growing electric vehicle (EV) and energy storage markets.

In March 2022, American Battery Factory (ABF), a new lithium-iron-phosphate battery maker, announced plans to develop Giga factories in the United States.ABF’s goal of developing a domestic battery manufacturing ecosystem will be the key to making energy independence and renewable energy a reality for the United States while also creating employment. This will assist the company to establish its hold in the United States LPF batteries market

In August 2021, major automakers including Ford, VW and Tesla are increasingly leveraging lithium-iron-phosphate (LFP) for electric vehicle (EV) batteries, substituting for the more commonly used nickel or cobalt formulations, to capitalize on lower costs. Following the announcement of Tesla to make a long-term shift toward LFP in its energy storage products and some entry-level electric vehicles. Thus, this adoption of LFP batteries in the automotive sector shall boost the growth of this market.

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