Boom In LFP Battery Use On The Way, But Not Without Hurdles

With wider adoption by some of the industry heavyweights, Lithium Iron Phosphate or LFP battery technology is set to flourish in the very near future. Its growing acceptance in the global market has strengthened the technology’s foothold in the automotive industry.

Strength of LFP

It’s noteworthy that the transition will be much easier because of the lower energy density in ESS. The key qualities that give LFP batteries an edge over conventional systems include affordability (lower cost per kWh), better output, safety, and longevity. Further, the absence of Cobalt as a constituent material means the batteries are one of the most environmentally-friendly options.

Although the LFP batteries are a little heavier than conventional ones, after installation, the ESS remains stationary anyway. Thus, the benefits outweigh the issues associated.

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Industrial Adoption

The LFP battery technology is witnessing a wider industrial adoption recently. The merits of LFP batteries have recently attracted EV major Tesla as well. The company’s CEO, Elon Musk, during a Q&A session on the Q4 2021 financial report, expressed his expectation of all stationary energy storage (ESS) products transitioning to Lithium Iron Phosphate (LFP) batteries chemistry. Some of the battery systems, such as Powerwall, Powerback, and Megapack, may use LFP batteries, especially the 3MWh Megapack units.

Last year, Volkswagen’s battery partner in China, Guoxuan High-Tech (popularly, Gotion High-Tech), presented a new battery cell with LFP chemistry with an energy density of 210 Wh/kg, aspiring to achieve 260 Wh/kg. Automakers like Daimler and Ford have also adopted the technology for their lower-range EVs.

While its prospects look quite promising, some bottlenecks may still pose a significant challenge to the wider adoption of the technology. Over 90% of the world’s LFP battery cell manufacturing capacity is based in China. Hence, a global shortage of LFP outside of the Asian powerhouse may disrupt western adoption.

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Moreover, the rising price of lithium carbonate, which is used in LFP batteries, poses a problem for the technology’s further growth. As per Benchmark Mineral Intelligence’s latest Lithium Price Assessment of 31 December, 2021, battery-grade lithium carbonate’s price has touched $41,925/tonne.