Chinese exports of lithium iron phosphate batteries and materials increase
Since 2024, the installed share of lithium iron phosphate battery in China has reached a record high, once exceeding 74%. In the international market, with the development of the global new energy industry and new energy vehicle penetration rate, the main new energy market represented by Europe and the United States has accelerated the shift to lithium iron phosphate battery. Accompanied by global battery manufacturers and car companies have turned to lithium iron phosphate technology route, the global lithium iron phosphate battery boom is emerging.
Benefiting from the growth in global demand for lithium iron phosphate batteries, the data statistics, from January to August this year, China’s lithium iron phosphate power battery exports 30.7GWh. In addition to the export of finished batteries, on the material side, according to the latest data from the General Administration of Customs, China’s lithium iron phosphate exports in August 2024 amounted to 262 tons, an increase of 60% compared with the ring, and an increase of 194% year-on-year. It is the first time since 2017 that the export volume exceeded 200 tons.
Despite the impact of raw material price fluctuations, the price of lithium iron phosphate material has fallen sharply in recent years, but the demand for lithium iron phosphate has increased rather than decreased. In the second quarter of this year, top 10 LFP cathode material manufacturers in China turned to the peak season of production, lithium iron phosphate manufacturers capacity utilization rate recovery is strong, many lithium iron phosphate battery manufacturers even full production and full sales.
Demand for lithium iron phosphate batteries increases in Europe and the United States
On the one hand, the power battery market for lithium iron phosphate battery demand is getting higher and higher, on the other hand is the powerwall battery and other energy storage market rapid growth driven by lithium iron phosphate battery shipments to improve. Power and energy storage dual track demand changes in the European and American markets are becoming more and more obvious. The reasons behind this include, lithium iron phosphate battery industrialization is highly mature, by virtue of energy density, cost, safety advantages can be given to the downstream application market to create a rich product portfolio, matching the diverse application scenarios.
Recently, GM Vice President Kurt Kelty made it clear that lithium iron phosphate battery technology will be used to significantly reduce costs. Tesla CEO Musk has said that two-thirds of future Tesla cars will use lithium iron phosphate batteries. In Europe, major car giants and battery manufacturers have even turned to lithium iron phosphate batteries across the board. In July this year, Renault placed an order for 39GWh lithium iron phosphate batteries, which were jointly provided by CATL and LG. Earlier, ACC, a joint venture between Stellantis, Mercedes-Benz and France’s Total, which originally planned to produce ternary batteries, is now planning to shift to lithium iron phosphate batteries. In addition, Volkswagen, BMW and other international car companies are planning to further expand the assembly of lithium iron phosphate batteries.
In terms of the energy storage market, Chinese battery companies have received nearly 100GWh of overseas energy storage orders. In June this year, EVE signed a supply agreement for 15GWh of lithium iron phosphate battery packs and high-density batteries with Powin, a U.S. energy storage system integrator. In September, EVA announced that its subsidiary EVA Power signed a supply agreement with AESI for about 19.5GWh of square lithium iron phosphate batteries. Meanwhile, Spanish independent power producer Grenergy Renovables extended its strategic agreement with BYD to increase the capacity of lithium iron phosphate batteries from 1.1GWh to 3GWh.
Lithium iron phosphate battery in the international market continues to expand, showing the global new energy transformation background, the global lithium competition pattern changes. In the past, the international market is mainly dominated by ternary batteries, accordingly, its battery market share is mainly held by Japan and South Korea battery companies as well. With the international market shifted from ternary to lithium iron, lithium iron phosphate battery to accelerate the expansion of the international market, and with the success of lithium iron phosphate battery technology, Chinese battery companies in the international battery market share gradually higher.
Chinese lithium iron phosphate accelerates export supply
Although Europe and the United States, Japan and South Korea and other car companies and battery manufacturers are speeding up the layout of lithium iron phosphate battery, but Chinese companies have the world’s most complete lithium iron phosphate industry chain supporting system and deep technical deposits. In the export of Chinese lithium enterprises, China’s lithium iron phosphate related enterprises in the world will also play a more important role. Nowadays, China’s lithium iron phosphate supply chain exports have accelerated significantly.
In April this year, Yuneng will set up a project company in Spain, with a total investment of $129 million, and Longpan lithium iron phosphate plant in Indonesia has officially put into production, with an annual capacity of 30,000 tons. In July this year, AESC factory in Spain has been officially opened, and will produce a new generation of LiFePO4 batteries. The American joint venture of EVE, ACT, opened its production program, with a planned annual capacity of 21GWh of lithium iron phosphate batteries. In September this year, WANRUN announced that it plans to invest 170 million U.S. dollars to carry out a new energy cathode materials and its industrialization research and development center project in the U.S. state of South Carolina, with a planned annual output of 50,000 tons of lithium iron phosphate. In addition, BYD, Huayou, CNGR shares and many other companies have also laid out the global lithium iron phosphate production capacity and accelerated the investment and construction of factories.
Of course, China’s lithium exports are also affected by geopolitical and trade barriers, such as Europe’s carbon tariffs, the United States by administrative intervention to raise tariffs on domestic battery-related products. But for Chinese companies themselves, along with the acceleration of lithium iron phosphate batteries to the sea, is also an opportunity to reintegrate the global lithium supply chain.
