China will continue to grow its LiFePO4 (LFP) battery industry for the thriving electric vehicle and energy storage markets. The chemistry, which is safer and less expensive than NMC, continues to be the top choice for Chinese EV and ESS manufacturers. It is gaining favor among global players as well, with Ford, Kia, Volkswagen, BMW, GM, Fisker and Rivian joining early adoptee Tesla.
In the ESS sector, LFP batteries are expected to remain strong. Experts that gathered at the Fastmarkets China Battery Raw Materials Conference held in Shanghai in December 2023 believed that these batteries would maintain dominance in the application. This is “despite a potential supply surge of the alternative sodium-ion battery,” according to an article posted on ETAuto.com. Working to LFP batteries’ advantage are an established supply chain, higher energy density than this new option and lower cost compared to nickel-based batteries.
Backing up this trend is LG Energy Solution’s projects, which include the release of an LFP battery-based ESS in November 2023 and the production of pouch types beginning 2026.
Other international players in this category are Samsung SDI, Saft and Panasonic.
The International Energy Agency (IEA) said that by 2035, more than 50 percent of new vehicles sold worldwide will be electric. In terms of accumulated sales volume, this will exceed 525 million units that year, from 450 million in 2030 and 250 million in 2023.
The same boom is seen in the energy storage field. According to South Korea-based SNE Research, up to 185GWh energy storage batteries were shipped worldwide in 2023 at a growth rate of 53 percent over the previous year. In its other report, the Li-ion battery ESS market is expected to reach 235GWh in 2024 or a 27 percent increase year on year and $40 billion or a 14 percent rise in value. By 2035, this will go up further to 618GWh, posting a 10.6 percent CAGR from 2023.
S&P Global analyst Anqi Shi said at the December 2023 conference in Shanghai that Li-ion batteries would account for 80 percent of the ESS market by 2030, with 90 percent of them based on the LFP chemistry.
China’s LFP battery strategy
In China, recent initiatives focus on developing and manufacturing large cylindrical LFP batteries, which manufacturers expect to find wider adoption in the energy storage field.
Yantai Lihua Power Science & Technology invested $1.38 billion in a new facility that began releasing such products for energy storage applications in early 2024. EVE Energy, a key LiFePO4 battery manufacturer, has introduced a series with a cell capacity of 20,000mAh and a life span exceeding 4,000 cycles. Its project, which completed the first production line in late 2022, already started turning out 1 million units by mid-2023.
Jiangxi Canhui, meanwhile, has begun the second phase of its LiFePO4 battery venture for energy storage, with a total investment of $138 million. This is scheduled to be fully operational in one or two years and will be capable of producing 200 million units with a total value of over $277 million.
Guansheng has announced its cooperation with Jilin Dongchi New Energy to set up Zhejiang Guansheng Dongchi New Energy Science & Technology. The total investment is $143 million. The new company will manufacture semi-solid-state LiFePO4 batteries, mainly for EVs and energy storage systems.
In addition to domestic expansion, some Chinese companies are extending their reach overseas. Gotion announced in late 2023 that it would be investing $2.4 billion in an LFP battery materials factory in the US. The facility will have a total area of 1.12sqkm and will begin mass production by the end of 2031. Gotion is planning to spend $2 billion on another plant in the US, which will have an annual production of 40GWh LiFePO4 batteries and battery packs.
The top manufacturers of LFP batteries in China are BYD, CATL, CALB, Gotion, EVE Energy and REPT. The first two companies account for more than 70 percent of the domestic market. Also operating in the country are Samsung SDI and Panasonic.
Many suppliers are found in the coastal provinces of Guangdong, Fujian, Zhejiang and Jiangsu, with northern and central areas also attracting companies.
Common LFP batteries
Cylindrical and prismatic LiFePO4 batteries that are widely available in China have a rated voltage of 3.2V, a charging cutoff voltage of 3.6 to 3.65V, energy density of 200Wh/kg and a life span of up to 5,000 cycles.
Most manufacturers accommodate customization requests, and their products are compliant with UL, CE, CB, UN 38.3 and RoHS requirements. They obtain anode and cathode materials, electrolytes, foils, separators and shells domestically or overseas, depending on buyers’ preferences.
In general, they leverage proximity to sources of cathode materials, which represent 40 percent of total costs. After all, China is the input’s largest production base, with top suppliers being Gotion, Hunan Yuneng and Tinci. The country also has an abundant supply of nano cathode materials, with Hunan Yuneng, Dynanonic, Wanrun New Energy, RT-Hitech and Liyuan collectively accounting for 73 percent of the global market. This is according to Zhong Zhi Xin Tou, a specialized market research company.
LFP battery, 2,000-cycle life span
Company: Fello Tech Co. Ltd
The 3.2V Battery IRF26650-8436 from Fello is a LiFePO4 battery with 3,500mAh rated capacity. It has 3.2V nominal, 3 to 3.5V operating and 3.65±0.2V charge voltages, 700mA charge and standard discharge current ratings, and 0 to 45 C charge and 10 to 60 C discharge temperatures. It has a life span of 2,000 cycles at 0.2C 100 percent DoD.
MOQ: 200 units
Lead time: 15 days
LFP battery, 70Ah rated capacity
Company: Shenzhen 3YBS Battery Co. Ltd
The 12V70Ah-1-0789 LiFePO4 battery from Shenzhen 3YBS has 70Ah rated capacity, 12V nominal voltage, ≤100ohm internal resistance, 840Wh nominal energy, -20 to 60 C discharge temperature and more than 2,000-cycle life span at 0.2C 80 percent DoD.
MOQ: 1 unit
Lead time: 5 days
LFP battery, 48Wh rated energy
Company: Shenzhen Vcell Power Technology Co. Ltd
This LiFePO4 battery from Shenzhen Vcell, the IFR38121-15AH, has 3.2V and 15Ah nominal voltage and capacity, 1C charge and 3C maximum continuous discharge current, 48Wh rated energy, 0 to 45 C charge and -20 to 80 C discharge temperatures, and more than 2,000-cycle life span at 100 percent DoD. It meets UL, MSDS, UN 38.3 and RoHS requirements.
MOQ: 1,000 units
Lead time: 25 days
LFP battery, 50Ah capacity
Company: Topa Technology Ltd
Topa’s 3250A-8370 LiFePO4 battery, with an alloy shell, has 50Ah capacity, 3.2V nominal voltage, 2.5 to 3.65V operating voltage range, 0.5mohm initial inner resistance and 315A maximum pulse discharge current. Dimensions are 148x134x26mm and the weight is 1,250±50g.
MOQ: 20 units
Lead time: 7 days
