Lithium iron phosphate (LFP) batteries for electric vehicles, promoted by Tesla CEO Elon Musk, dominated China, the world’s largest auto market, last year. According to official data, such cells accounted for 57% of the total electric vehicle battery production in China in 2021.
LFP batteries have become the most popular in China because they use relatively cheap iron in the cathode instead of more expensive metals like nickel. The growth of their production coincided with the emergence of electric vehicles as mass-market products in China. In 2021, almost every sixth car sold in China was electric.
As Chinese dealers sell more electric vehicles and most of them are equipped with LFP batteries, the production of such batteries is growing. In 2021, Chinese companies produced LFP batteries with a total capacity of 125 GWh, more than triple the 2020 figure.
American and European automakers are less interested in LFP batteries because they tend to have lower energy densities than comparable nickel-based cathode batteries, meaning cars with LFP batteries offer less range. In addition, such batteries work worse in cold weather.
Over the past two decades, Chinese companies trying to catch up with American and Japanese competitors in battery technology have focused on improving LFPs, not only because of the lower cost, but also because these cells pose a lower risk of fire. Contribution to their improvement and subsidization of developments by the Chinese government.
One of the main proponents of LFP technology is Elon Musk, who says that finding enough nickel at an affordable price is a major manufacturing challenge. He objects to customers who buy a car with an LFP battery getting a second-rate product.
Automakers in the US, Europe and Japan are ramping up battery production and many have turned their attention to LFP, but most are not as far along as Tesla and the Chinese manufacturers, who have been developing the technology for some time.
Tesla first used LFP batteries in the China-made Model 3 in 2020. Last October, the company announced it would expand the use of iron-based cathode batteries to all of its entry-level vehicles. The Chinese company CATL, the world’s largest manufacturer of batteries for electric vehicles, supplies Tesla LFP batteries.
Chinese manufacturers of electric vehicles are also actively using LFP. The Hong Guang Mini, a tiny $4,400 electric hatchback, was China’s top-selling electric car in 2021 and uses LFP batteries. “Almost every conceivable car brand is negotiating with us about a battery cooperationsaid the vice president of China’s BYD when announcing the new LFP battery.