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The reemergence of LFP batteries

Written by Theo Koenig - October 07, 2020

Edited by Kfir Kedem

The rapid rise in electric vehicles means that the demand for batteries has increased dramatically in recent years. The focus thus far, especially in the automotive industry, has mainly been on lithium nickel-manganese-cobalt oxide (NMC) and nickel-cobalt-aluminum (NCA) cells. These successful systems have the advantage of quick recharging times and high energy density. However, the new trend that is developing among battery makers is that of lithium iron-phosphate (LiFePO4 or LFP for short) cells.

Evidence of this can be seen all over the industry. BYD, the biggest Chinese vehicle manufacturer (backed notably by Hathaway Berkshire), has seen an astonishing jump in stock price (currently, the price is triple that of what it was at the same time last year). In 2018 the company opened the world’s biggest battery-production factory, specializing in LFP batteries, as opposed to cobalt, nickel, and manganese systems. BYD has always maintained that innovation in the LFP sector would pay out in the future.

A further example is that of CATL, who have also been changing their strategy towards LFP cells. The biggest example of this is the recent Tesla announcement of a drop in price of the Model 3 in China, which is attributed to the fact that CATL will be supplying the EVs with LFP batteries.

LFP has various advantages and disadvantages. The main disadvantage is the fact that LFP cells have a lower energy density compared to their rivals. This translates into longer and more frequent charging times. That being said, incremental improvement in energy density over the last decade means that LFP batteries are quickly catching up, despite still lagging behind. Decreasing the manufacturing costs has also been an arduous progress. However, according to a report by Wood Mackenzie, the cost of LFP batteries had decreased by more than 85% since 2010. At this point, the cost of manufacturing LFP cells is lower than that of NMC and NCA batteries.

Going beyond the low cost, LFP batteries can draw upon the fact that they possess good thermal stability. For our more technical readers, this comes down to the fact that the P-O bond in LFP is stronger than that of a Co-O bond of NMC and NCA cells, meaning oxygen atoms get released at a slower rate. In the event of over-charging or mishandling, this prevents the occurrence of thermal runway (rapid increases in temperature due to current flow). A strong thermal stability for batteries is essential. Cold temperatures will reduce performance while hot climates will shorten the service. For LFP cells, a strong thermal stability produces a longer life cycle.

Last but not least, LFP cells can benefit from the fact that they do not require cobalt, nickel or manganese. Not only are these rare earth materials that are becoming increasingly expensive, but the mining process is also notoriously tough. The EV market is still haunted by the rather hypocritical notion of being environmentally friendly while depending on scarce earth materials.

Auto Trendy’s take:

Despite being an older technology, LPFs cells represent the future of batteries; plain and simple. Many contend that the argument of improved safety is debatable at best and often depends on charging strategies. Whether or not this is the case, the truth is that LFP batteries offer advantages that NMC and NCA batteries will never be able to. The biggest of those is the avoidance of rare, expensive materials. From a PR perspective, avoiding nickel (main exporters being Indonesia and Zimbabwe) and cobalt (60% of world exportation from DRC) should help draw environmentally conscious clients who are turned-off by the mining industry. Development costs will continue to decrease while improvements in gravimetric energy density will also continue, leave the future of LFPs with plenty of room for growth. The LFP market share stood at 10% in 2015 and according to Mackenzie, will triple to 30% by 2030. The question now, is whether developments in promising but unscalable technologies might render LFP obsolete in the long-term. AESC (Nissan and NEC’s battery venture), Ionic Materials and Saft are among many that deserve a shout-out for their research into alternative battery forms that could replace LFP cells in the distant future.