Lithium Iron Phosphate Batteries Market

[290 Pages Report] The global Lithium iron phosphate batteries market is estimated to grow from USD 17.7 billion in 2023 to USD 35.5 billion by 2028; it is expected to record a CAGR of 14.9% during the forecast period. Recently regions has witnessed a rapid growth in lithium iron phosphate batteries demand in recent years due to the increased adoption by EV manufacturers and rising industrial automation. The market for lithium iron phosphate batteries is projected to benefit greatly from rising investment by key global players.

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Lithium Iron Phosphate Batteries Market Dynamics

Driver: Increasing adoption of lithium iron phosphate batteries by EV manufacturers

Lithium-ion and lithium iron phosphate (LFP) batteries dominate the current EV battery landscape. Although LFP batteries have been around for years, they have always played a minor role in the EV sector. However, the number of EVs expected to adopt LFP batteries in 2022 is projected to reach new heights. As of 2021, the share of the LFP batteries in the global EV market has reached ~14%, an increase of 5.2% from 2020. This development can be attributed to the properties and characteristics of the LFP batteries, such as enhanced charge efficiency, relatively better discharge capabilities, and lesser energy density,, compared to than conventional Li-ion batteries.

EV manufacturers across the worldwide are also planning to make tremendous high investments in the procurement of batteries and the manufacturing of EVs, for the next ten years. These measures adopted by global EV manufacturers are largely driven by environmental concerns and, government policies, and supported by rapid technological advances advancements that have improved reduced the battery cost, range, and charging time of these batteries. For instance, Daimler, a leading player in the global EV market, has proposed an investment of ~USD 30 billion, specifically for acquiring batteries. Similarly, Hyundai and its affiliate Kia are expected to invest USD 20 billion over five years in electric and self-driving vehicles, as well as and batteries. In addition, favorable government policies and the rapid development of EV charging infrastructure are expected to further fuel the adoption of EVsel the adoption of EVs, consequently boosting the demand for LFP batteries

Restraint: Risks associated with Safety issues and disposal of spent lithium-based batteries

Lithium-based batteries are classified as hazardous waste due to their ignitability, reactivity, and toxicity when improperly disposed of. Even seemingly discharged batteries can still pose a danger if they contain a significant charge. These batteries contain hazardous chemicals, including acids and heavy metals like mercury and lead. There have been incidents, such as a 2007 fire caused by lithium-based batteries, resulting in the closure of major motorways in the UK. To handle spent batteries safely, it is necessary to store them in watertight containers away from flammable materials and have appropriate fire extinguishing equipment nearby. Unplanned discharges from residual charges in spent batteries can harm the ecosystem. Proper labeling and storage are essential, especially for small batteries that can be accidentally ingested. Large lithium iron phosphate batteries may be mistaken for lead-acid batteries and require separate storage. Government regulations govern the storage and transportation of spent batteries due to these risks.

Opportunities: Transition from conventional power generation to renewable generation

The world is undergoing a rapid transition from conventional power generation toward renewable generation because of factors such as the increasing trend of decarbonization and a sharp decline in the cost of sustainable energy sources such as solar and wind. Renewable energy sources are intermittent and to overcome this, a need for energy storage technologies is generated; a need for energy storage technologies is generated to overcome this. The battery energy storage systems store excess power generated by renewable energy sources during off-load periods. They also reduce emissions, . and The growth of renewable energy generation is also driving the fueling the adoption of battery storage solutions. Lithium iron phosphate batteries are mainly used in energy storage applications owing to their safety feature use nature and high thermal stability. In addition, these batteries are not prone to catching fire or releasing harmful gases even if they get overheated. They use a high current for fast charging, which makes them suitable for energy storage applications. Further, the demand for lithium iron phosphate batteries in utility energy storage projects is increasing due to their declining cost of lithium iron phosphate batteries, coupled with the development of the energy storage space.

Challenges: Technological drawbacks of LFP batteries

Lithium iron phosphate batteries exhibit lower energy density compared to other lithium-ion batteries, which is a significant consideration in the current context where small and lightweight batteries are preferred for electric vehicles (EVs). To achieve higher energy densities exceeding 300 Wh/kg and 800 Wh/L, the electrode powder particles need to be reduced in size to pack more densely. This increases the contact surface area, improving the cell's charging rate and energy density. However, it also leads to more unwanted reactions, accelerated battery material degradation, and reduced lifespan. Coating the particles with an ultrathin buffer layer is a solution, but the challenge lies in ensuring high conductivity and chemical inertness of these layers..

Lithium iron phosphate batteries Market Ecosystem

Prominent companies in this market include well-established, financially stable manufacturers of Lithium iron phosphate batteries systems and components. These companies have been operating in the market for several years and possess a diversified product portfolio, state-of-the-art technologies, and strong global sales and marketing networks. Prominent companies in this market include BYD Company Ltd. (China), Contemporary Amperex Technology Co., Limited. (China), Gotion, Inc. (US), CALB (China), and A123 Systems LLC (US).

The medium segment, by voltage, is expected to be the second largest market during the forecast period.

This report segments the lithium iron phosphate batteries market based on voltage into different types: low (Below 12V), medium (12–36V), and high (Above 36V). The medium (12–36V) segment is expected to be the second largest market during the forecast period. The high-power voltage makes these batteries ideal for usage in industries such as electrical vehicles, oil & gas, medical, telecom, and solar energy storage. The growing EV market and the rising adoption of energy storage systems have increased the need for batteries with high power voltage that can keep the devices running for long hours and, at the same time, provide enhanced safety due to low thermal runway, which may result in a fire in the case of excessive overheating. These batteries are often grouped to form modules, and these modules are used in applications requiring heavy loads such as EVs, industrial applications, robots, medical applications, hybrid trucks, trains, and power backup.

By industry, the power segment is expected to be the third largest during the forecast period

This report segments the lithium iron phosphate batteries market based on industry into seven segments: automotive, power, industrial, consumer electronics, aerospace, marine, and others. The power industry is working on generating renewable energy and storing it for multiple uses. This stored energy is produced, controlled, and distributed using smart grid technology. Attributes such as low cost, less space required for installation, high life cycle, safety, and less prone to the thermal runway are a few of the driving factors for the adoption of lithium iron phosphate batteries in smart grids and renewable energy storage systems. Lithium iron phosphate batteries are more resistive toward extreme temperatures, which means the battery capacity is slightly reduced, whereas, in the case of lead-acid batteries, it is reduced by 50%..

“North America”: The third largesty in the lithium iron phosphate batteries market”

North America is expected to third largest region in the lithium iron phosphate batteries market between 2023–2028, followed by the South America, and Middle East & Africa. This can be majorly attributed to the support provided by the North American Free Trade Agreement (NAFTA). The region is also among the largest markets for EVs. Various automotive companies such as Tesla Motors Inc. (US), General Motors Corp. (US), and Mitsubishi Motors Corp. (Japan) are actively working in the field of EVs in the US and Canada, leading to the rapid adoption of lithium iron phosphate batteries. The US is enriched with ample lithium deposits that can be very well exploited in the future to produce lithium iron phosphate batteries. This, in turn, is driving the demand for lithium iron phosphate batteries in the region..

Key Market Players

The lithium iron phosphate batteries market is dominated by a few major players that have a wide regional presence. The major players in the lithium iron phosphate batteries market include BYD Company Ltd. (China), Contemporary Amperex Technology Co., Limited. (China), Gotion, Inc. (US), CALB (China), and A123 Systems LLC (US). Between 2018 and 2022, Strategies such as contracts, agreements, partnership, product launches, and expansions are followed by these companies to capture a larger share of the lithium iron phosphate batteries market.

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Scope of the Report

This research report categorizes the lithium iron phosphate batteries market by design, industry, capacity, voltage, application and region.

On the basis of by Design:

• Cells
• Battery Packs

On the basis of by Capacity:

• 0–16,250 mAh
• 16,251–50,000 mAh
• 50,001–100,000 mAh
• 100,001–540,000 mAh

On the basis of by Industry:

• Automotive
• Power
• Industrial
• Consumer Electronics
• Aerospace
• Marine
• Others

On the basis of by Application:

• Portable
• Stationary

On the basis of by Voltage:

• Low (below 12V)
• Medium (12V–36V)
• High (above 36V)

On the basis of Region:

• North America
• South America
• Europe
• Asia Pacific
• Middle East & Africa

Recent Developments

• In March 2023, CATL and the BAIC Group entered into a strategic agreement for commercial collaboration and the deployment of sophisticated technology. according to the agreement, CATL will play a role in the vehicle development and manufacturing of BAIC Group's electric vehicles, as well as supply competitive EV battery goods and services.
• In March 2023, Gotion, Inc. and Edison Power Co., Ltd. signed an agreement to jointly expand the Japanese large storage battery and recycling industry, promote the renewable energy, and introduce Gotion's batteries into the Japanese market.  Additionally, the company will also work with Edison Power to establish a circular storage battery recycling system for LFP batteries in Japan..
• In November 2022, BYD Company Ltd. Announced an aim to develop a new power battery production center in Wenzhou, Zhejiang province, China, with an annual capacity of 20 GWh. The first production line is expected to start production in 2024.
• In August 2022, CALB has announced to launch a 350Wh/kg battery containing lithium ferromanganese phosphate with long cruising range to support 4C fast charging, as well as a 400Wh/kg semi-solid battery.

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