Since the beginning of this year, due to the continuous increase in overseas car companies and market demand, the domestic lithium iron phosphate industry has accelerated its "going overseas". Links, including lithium iron phosphate batteries and materials, have successively started the global offensive of lithium iron phosphate through export, overseas cooperation, and local factory building.
Recently, Tongcheng Guoxuan, a wholly-owned subsidiary of Guoxuan High-Tech, officially completed and produced the first phase of the 40GWh annual output 10GWh project. The project's second phase started simultaneously on the same day with an annual output of 20GWh.
Guoxuan High-Tech disclosed to Battery China that Tongcheng Guoxuan's products are mainly lithium iron phosphate batteries, which are mainly used for export and will be exported to the United States, India and other countries in the future.
It is worth noting that in December last year, Guoxuan Hi-Tech signed an agreement with a large listed automobile company in the United States. The automobile company plans to purchase lithium iron phosphate batteries with a total amount of not less than 200GWh from Guoxuan Hi-Tech between 2023 and 2028.
To meet the above customer needs, Guoxuan Hi-Tech, on the one hand, exports LFP batteries through the Chinese battery production base; on the other hand, it plans to build a factory in the United States to produce the required lithium iron phosphate batteries.
Coincidentally, CATL recently revealed that the company signed a cooperation agreement with Ford Motor Company to supply lithium iron phosphate battery packs for the Ford Mustang Mach-E model in the North American market from 2023 and to supply lithium iron phosphate battery packs for Ford Mustang Mach-E models in the North American market from early 2024. The Ford pure electric pickup F-150 Lightning provides lithium iron phosphate battery packs.
In addition to obtaining huge orders for lithium iron phosphate from overseas car companies, domestic battery companies currently use lithium iron phosphate batteries as one of the important routes for products built overseas.
On June 27, Guoxuan High-Tech announced that it intends to set up its first battery production base in Europe in Göttingen, Germany. The current planned production capacity is 18 GWh of lithium batteries per year. "(Guoxuan's planned) factory in Göttingen, Germany (constructed) will mainly produce lithium iron phosphate batteries. Lithium iron phosphate batteries are the main ones." The relevant person in charge of Guoxuan Hi-Tech told Battery China.
Recently, Bloomberg quoted people familiar with the matter as saying that Ningde Times plans to build a factory in North America, and negotiations on incentives have entered the later stage. "Ningde Times will invest 5 billion US dollars to build a factory in North America. Batteries and lithium iron phosphate batteries are mainly supplied to two car companies, Tesla and Ford."
Battery China learned from Envision Power that, based on the needs of overseas energy storage customers and car companies, Envision's overseas power battery bases "will consider deploying lithium iron phosphate batteries."
This year, Chinese battery companies have accelerated the introduction of lithium iron phosphate batteries to support international car companies. On the one hand, driven by complete vehicles and the market, the electrification of cars in Europe and the United States has accelerated, car companies have quickly entered the mass production era, and lithium iron phosphate's cost advantage has become increasingly prominent. On the other hand, domestic companies are at the forefront of technological innovation in lithium iron phosphate materials, batteries, systems, etc., which is sufficient to meet the needs of international car companies. For example, Ningde Times stated that thanks to the excellent characteristics of the lithium iron phosphate battery system in terms of battery life and thermal stability, models paired with Ford will have excellent performance in terms of environmental adaptability.
Volkswagen, Mercedes-Benz, Ford. Mainstream car companies have successively announced the use of lithium iron phosphate batteries
The data shows that from January to June this year, my country's power battery output totalled 206.4GWh. Among them, the cumulative output of lithium iron phosphate batteries was 123.2 GWh, accounting for 59.7% of the total output, a year-on-year increase of 226.8%.
In terms of installed capacity, from January to June this year, my country's cumulative installed capacity of new energy vehicle batteries was about 110.1 GWh. Among them, the installed capacity of lithium iron phosphate batteries is about 64.4 GWh, a year-on-year increase of 189.7%, accounting for 58.5% of the total installed capacity, and continues to surpass Sanyuan to occupy the mainstream.
Lithium iron phosphate batteries are popular in the Chinese market due to their low cost, abundant raw materials, high safety, and long service life, including Tesla, BYD, SAIC-GM-Wuling, Leap, Xiaopeng, Hezhong, and GAC Aian, Chery, Changan and other mainstream car companies all use lithium iron phosphate batteries as the main supporting battery type in the Chinese market.
Nowadays, these advantages of lithium iron phosphate have caused international car companies to "turn their backs".
Since 2021, Volkswagen, Tesla, Ford, Mercedes-Benz, Hyundai and many other international car companies have successively stated that they are considering or will further expand the use of lithium iron phosphate batteries.
Among them, in March 2021, Volkswagen revealed on its "Power Day" that it will use lithium iron phosphate batteries on entry-level models in the future, and it will be one of the main battery routes of its platform; In the first half of the year, the research and development of electric vehicles equipped with lithium iron phosphate batteries have been started, and will be launched in regions outside China; Lithium iron phosphate batteries are used in Mercedes-Benz EQA and EQB...
Since Tesla entered the Chinese market, it has discovered many advantages of lithium iron phosphate. Since 2021 it has been actively "advertising" for lithium iron phosphate in markets other than the Chinese market, and said that in Tesla North America and other factories Switching lithium iron phosphate batteries for Model 3 and Model Y. According to the latest data, nearly 50% of Tesla's electric vehicles produced globally in the first quarter of 2022 would use lithium iron phosphate batteries.
Tesla has achieved great success in lithium iron phosphate battery models, which is obvious to all international car companies. After Ford's full transformation to electrification, it has also made it clear that it will use lithium iron phosphate batteries in its main mass-market models and signed an in-depth cooperation agreement with Ningde Times to carry out supporting cooperation on lithium iron phosphate batteries around the world. Ningde Times will match Ford with power batteries for its North American, European and Chinese market models.
Rivian, a new force in North America, also announced that it would launch the R1T pickup truck, R1S SUV and EDV models equipped with lithium iron phosphate batteries.
In the future, more international car companies will adopt lithium iron phosphate batteries on a large scale in mass-market models.
Guoxuan High-Tech, Ningde Times, and Envision Power plan to build large-scale power battery production bases in overseas markets. They have successfully taken lithium iron phosphate batteries as one of their main products. The "forward-looking prediction" made by car companies regarding changes in battery route selection. The editor speculates that other domestic battery companies will build factories overseas, and lithium batteries for caravans will also be an important product option.
The overseas layout of upstream enterprises is simultaneously launched
The domestic market still dominates the lithium iron phosphate industry chain at this stage. Domestic lithium iron phosphate industry chain enterprises are also going out simultaneously, aiming at the demand for lithium iron phosphate batteries in overseas new energy vehicles and energy storage markets.
Dongcheng Technology signed a strategic cooperation agreement with South Korean lithium battery giant SK in 2021, and the two parties will cooperate in the lithium iron phosphate material business. At the same time, the two parties will jointly establish joint ventures to build overseas production capacity projects, cooperate in the development of cathode materials business, and jointly explore markets in Europe, Asia and the United States.
In addition, Longpan Technology has also announced that its holding subsidiary Changzhou Liyuan cooperates with STELLAR to invest in the establishment of a joint venture company in Indonesia, in Morowali Industrial Park (IMIP), Morowali County, Central Sulawesi Province Invest in the development and construction of a cathode material project with an annual output of 100,000 tons of lithium iron phosphate.
In this regard, Longpan Technology said that lithium iron phosphate's current global production capacity is mainly concentrated in China, and overseas lithium iron phosphate production capacity construction is relatively small, lacking large-scale production capacity. The company's current domestic lithium iron phosphate cathode material production base mainly supplies domestic customers. The overseas construction of lithium iron phosphate cathode material factories mainly supports overseas customers better.
In the future, it is expected that more lithium iron phosphate material companies will go overseas with the help of Chinese battery companies and cooperate with overseas battery companies. They will also go abroad to participate in the game of the international market for lithium iron phosphate.
International car companies' recognition and favour of lithium iron phosphate batteries have made traditional overseas battery companies nervous. They have also begun to consider or are deploying lithium iron phosphate batteries. Just last month, LG New Energy, the world's second-largest battery company, announced that it plans to take the lead in producing lithium iron phosphate batteries in LG's China factory in 2023. It has not been revealed whether it will expand to other markets; SK On also revealed that it is considering developing phosphoric acid. Iron-lithium battery, "although its energy density is not as good as that of ternary batteries, it has obvious cost and thermal stability advantages."
At this stage, lithium iron phosphate is still in the import stage in markets outside of China. With the acceleration of domestic battery companies exporting overseas supporting facilities and overseas factories gradually putting into production, it is believed that in the international market, there may also be a "turnaround" of lithium iron phosphate in the Chinese market. In the future, more overseas car companies may introduce the lithium iron phosphate route in their models. At that time, the international market may continue the current fierce offensive of lithium iron phosphate in the Chinese market.