Application Prospect Of Lithium Iron Phosphate Battery

1 Introduction

    With the continuous development of the global economy, the energy crisis has gradually deepened, and the awareness of environmental protection has continued to increase. As a new energy and environmentally friendly low-carbon power battery industry, it has developed rapidly, and lithium-ion batteries have become numerous power batteries due to their excellent performance and moderate manufacturing costs. The mainstream development direction of the country. With continuous breakthroughs in materials and battery performance technology and the gradual decline in production costs, lithium-ion batteries will gradually strengthen their advantages of light weight, long cruising range, wide application range, high energy density, and high output power, and they will be used as the main power battery. Development is the main type of power battery for new energy vehicles today. At present, the cathode materials for lithium-ion power batteries in industrial applications at home and abroad include lithium iron phosphate (hereinafter referred to as LFP), lithium manganate, and ternary (lithium nickel cobalt manganate, lithium nickel cobalt aluminate), among which lithium iron phosphate is Its higher safety and stability, longer cycle life and lower cost advantages have been growing rapidly in China. With the rapid development of new energy vehicles and power batteries, the technology and technology of the LFP material industry have continued to grow in recent years. Mature, homogenized competition is prominent, based on rapid technological iteration and industrial ecological cooperation, the LFP market is accelerating the concentration of leading companies in the steady growth, and the industry concentration has further increased. LFP has inherent cost advantages, and there is a tenacious living space in the cost-sensitive market. The superposition of some new technical solutions can solve the performance shortcomings to a certain extent. In the past year, the demand for LFP industry chain has recovered, the supply and demand pattern has been improved, and the rebound of LFP in the power battery market will be further strengthened.

2 Application areas of lithium iron phosphate batteries

    The current application areas of LFP batteries include new energy vehicles, energy storage, 5G base stations, two-wheeled vehicles, heavy trucks, electric ships and other fields. Among them, the application of new energy vehicles accounts for the largest proportion, including new energy passenger vehicles, new energy Passenger cars and new energy special vehicles; currently use LFP batteries in the energy storage field accounted for more than 94%, including new products and echelon batteries, mainly used in UPS, backup power supply and communication energy storage fields; the future development of the electric ship market is expected to be relatively high. Well, all applications in this field are currently LFP batteries; LFP batteries have also begun to be used in the two-wheeler battery swap market. As the market begins to further get rid of policy and move towards real marketization, opportunities for LFP batteries will also be further opened.

3 Application prospects of LFP batteries

3.1 Application prospects in the field of new energy vehicles

    Since 2020, the LFP battery market has begun to pick up and entered a new growth cycle. At the beginning of last year, Tesla and CATL entered into the "cobalt-free battery", bringing the LFP battery back to the center of the stage again. Tesla electric vehicles equipped with LFP batteries undoubtedly quickly opened the prelude to the strong return of LFP batteries in the power battery market. Driven by the significant increase in the sales of many models supporting LFP batteries such as the domestic Model 3, BYD Han EV, Hongguang MINI EV, etc., including CATL, BYD, Gotion, REPT Energy, GREAT Power and other battery companies, The installed capacity of LFP batteries in the passenger car market has increased significantly. According to industry statistics, the proportion of LFP  battery shipments in total power battery shipments has risen from 28% in 2019 to about 35-40% in 2020.

    At the beginning of the new year of 2021, the latest industry trends indicate that LFP batteries will set off a wave in the passenger car field in 2021. From the perspective of industrial policy, the new energy vehicle subsidy policy was officially implemented in early 2021, indicating the direction for OEMs in the planning of new energy vehicles. From the perspective of the general trend, new energy vehicles have completed the transformation of the industrial development mode driven by national policies to the development mode driven by market demand. In 2021, the new energy vehicle subsidy standard will be reduced by 20% on the basis of 2020. The implementation of the subsidy policy and the elimination of the transitional period of superimposed subsidies will help promote the normal growth of the annual production and sales of new energy passenger vehicles in 2021. From the perspective of industrial layout, CATL, BYD, Gotion and other head battery companies are actively increasing the production capacity of LFP batteries. The CTP batteries and blade batteries based on the LFP solution launched by CATL and BYD have already been obtained. The market recognizes that it is currently actively expanding its LFP battery production capacity. In addition, Gotion has also upgraded its LFP battery products. It recently launched 210Wh/Kg LFP soft pack batteries and JTM technology. Major mainstream battery companies are significantly expanding LFP battery production capacity and product upgrades, and will seize market opportunities in 2021 in terms of supporting LFP batteries for passenger cars. In general, as major passenger car OEMs accelerate the launch of LFP models and battery companies further reduce manufacturing costs, the competitive advantage of LFP batteries in the passenger car field will be further highlighted, and the ranking of power battery installed capacity in the domestic passenger car field will also be A new round of adjustments will appear.

    In order to estimate the installed capacity of LFP batteries in my country from 2021 to 2025, we make the following assumptions: First, the production and sales of new energy vehicles in my country will maintain steady growth from 2021 to 2023; the synergy of high-level autonomous driving and new energy vehicles from 2024 to 2025 The effect is significant. By 2025, the scale of production and sales of new energy passenger vehicles will reach 5.5 million, and commercial vehicles and special vehicles will be close to 6 million, basically achieving the preset goals of the "New Energy Vehicle Industry Development Plan (2021-2035)". Secondly, in pure electric passenger cars, A00-class models maintain about 20% of the market share, and the penetration rate of LFP batteries, relying on cost advantages, is increasing year by year, and finally dominates; A0~A1 class models maintain about 50% of the market share, considering the overall space , Battery life, cost, power and other factors, the proportion of lithium iron is steadily rising. In general, LFP power batteries usher in a double increase in the amount and positioning of the passenger car field. Finally, the battery charge of each type of pure electric passenger vehicle has increased slightly year by year. Based on the above estimates, by 2025, the domestic installed capacity of LFP power batteries is expected to reach 136GWh, and the share of LFP in the power battery market is expected to reach between 40% and 50%. If you look at the world, considering that leading OEMs have also changed their attitudes towards LFP batteries, LFP batteries may have a broader market space. By then, the global annual output of LFP used only for power batteries may approach 50 About ten thousand tons. In short, from the mainstream selection in the early stage of industrial development, the rapid development of the industry to the gradual maturity period, LFP power batteries are about to usher in vigorous development, and it is hoped that the foundation will last forever.

3.2 Application prospects in the field of communication energy storage

    The application of LFP batteries in 5G base stations has also shown a rapid growth trend, opening up new market opportunities. In the first half of 2020, China Tower and China Mobile have successively bid for 5G base station backup power LFP battery energy storage projects. The winning bidders include GREAT Power, EVE, Narada Power, ZTT, Highstar, Shuangdeng Group, Vision Power, Coslight Power, PLB Battery, etc. The "China Tower and China Telecom's LFP Battery Products for Power Backup Joint Bidding Announcement" was officially released, with an estimated bidding volume of 2.09GWh. In the future, China will need to build or renovate at least 14.38 million base stations. Estimated with a single station energy consumption of 2700W and emergency 4h, the 5G base station energy storage market will provide 155GWh of demand for LFP batteries in the future, and the corresponding market size will exceed 100 billion yuan. 

3.3 Application prospects in the field of two-wheelers

    LFP batteries have also been well used in the electric bicycle industry. From the perspective of the domestic market, the implementation of the new national standard has brought large-scale replacement demand, which will promote the continuous increase of sales of two-wheel electric vehicles. The continuous development of the sharing economy and the large-scale launch of shared motorcycles on the market have also provided a strong impetus for the production and sales of two-wheeled electric vehicles. Driven by the cooperation of leading battery companies such as CATL, BYD, Gotion, and shared electric bicycle giants such as Halo and Didi, the volume of LFP batteries has increased significantly, and many of them were mainly lithium manganese batteries or ternary batteries Two-wheeler battery companies on the technical route have begun to turn to LFP batteries, and the market share of LFP batteries is expected to increase substantially in 2021. In summary, driven by many favorable factors such as the new national standard, sharing, takeaway, express delivery, export, etc., two-wheelers will usher in explosive growth. During the period from 2022 to 2023, there will be more than 50 million vehicles, going straight to 60 million vehicles. Preliminary prediction is that by 2025, 70% of electric bicycles will be lithium battery models.

    From the perspective of overseas markets, the new crown epidemic has changed the travel concepts and modes of many people in Europe and the United States. Electric two-wheelers are popular for their clean and convenient advantages. Southeast Asia and India are booming economically, and low-cost, reliable and durable electric two-wheelers Wheels will become the main means of transportation for hundreds of millions of people with their unparalleled cost performance. The strong demand in overseas markets will provide tens of millions of incremental space for the production growth of China's electric two-wheelers. Two-wheeled electric vehicles will become a huge industry with a scale of hundreds of billions and become a symbol of China's manufacturing industry. With the One Belt One Road strategy going global, it will serve the travel of billions of people and provide impetus for the happy life of all mankind.

3.4 Application prospects in the field of heavy trucks

    The application of LFP batteries in the field of heavy trucks is accelerating. The Ministry of Industry and Information Technology announced the latest batch of "Announcements on Road Motor Vehicle Manufacturers and Products". There are 16 heavy trucks in new energy logistics vehicles, 10 of which are clearly equipped with LFP batteries. Moreover, electric heavy trucks have been adopted in fields such as road-rail combined transportation, mines, steel mills, and ports due to their high economic efficiency. The industry predicts that during the "14th Five-Year Plan" period, the penetration rate of pure electric heavy trucks can reach 10%. If the sales of heavy trucks reach 1 million in 2025, the pure electric heavy trucks are expected to reach nearly 100,000. Take the FAW Jiefang J6P pure electric swap tractor as an example, which is equipped with a LFP battery from the CATL with a power of 282kWh. If you take 250kWh as the average level to calculate, 100,000 heavy trucks need to be equipped with at least 25GWh of batteries.

3.5 Application prospects in the field of electric ships

    The wave of electrification is rapidly sweeping across the ship sector. The application fields of electric ships and electric vehicles are quite different, and the performance requirements of lithium batteries are also different. At present, many battery companies have accelerated the layout of lithium-ion ships. CATL, EVE and Gotion are typical representative enterprises in the field of electric ships. At present, the electric ships deployed by EVE, CATL and Gotion, without exception, all use LFP batteries. At present, compared with the traditional fuel cost, the price of LFP batteries has become economical in the field of marine applications. In terms of safety, LFP power batteries and BMS battery management systems have developed rapidly in recent years. The increase in charging and discharging rates has made ships start acceleration and power handling better, and they have already possessed the technical conditions for promotion and application on ships. LFP batteries have become the best choice for marine power batteries at this stage due to their high safety, long life, low cost, balanced performance and other advantages.

    With the increasingly stringent environmental protection policies and the continuous improvement of lithium battery technology, it is expected that the electrification of ships will enter a period of rapid development in the next few years, and pure electric ships will become the mainstream direction of development. The average lithium battery capacity of a new energy vehicle is 40-50 degrees, while the battery capacity of a luxury electric cruise ship is around 3000 degrees. It is estimated that the global electric ship market will reach more than 45 billion yuan in 2025, and the market prospect is very broad. The demand for lithium batteries brought about by the electrification of ships will enter a period of rapid growth. It is estimated that the demand for LFP batteries for electric ships will exceed 6GWh in 2025.

4 Production and sales, market concentration and price trends of LFP materials

    Under the trend of counterattack of LFP batteries, the production and sales of LFP materials, market concentration, and prices have also changed. From the perspective of production and sales data, the output in 2017-2018 remained at 70-80,000 tons. The increase in demand in the energy storage field from 2019 has led to the total output increasing to 90-100,000 tons. In 2020, due to strong demand in the second half of the year, the output of LFP Increased to 140,000 tons. In 2021, the demand for new energy vehicles, heavy trucks, ships, electrochemical energy storage and other fields will be released together. It is estimated that the demand for LFP materials will reach about 250,000 tons this year. In terms of market concentration, the LFP battery market will be highly concentrated in 2020, with several leading companies occupying approximately 80%-90% of the market share. From the perspective of price, due to the short-term supply and demand shortage caused by the increase in LFP battery shipments, the price of LFP materials will start to increase in early November 2020. At the beginning of 2021, the price of mainstream LFP materials will be 4-40 thousand yuan/ About ton, the price of LFP materials for energy storage is about 35,000-38,000 yuan/ton, and the price of LFP materials for power is about 43,000 yuan/ton. However, considering that the total production capacity of LFP materials in the industry is not small, and the impact of upstream mineral futures is relatively small, it is expected that the price of LFP materials in 2021 will maintain a stable operation after a slight increase.

5 The new development direction of LFP battery enterprises

    LFP batteries will be used on a larger scale after 2021. LFP  battery companies will show the following changes in terms of products, operations, technology, and layout: battery-side sales will be transferred to operations, and companies will change their sales model to leasing Operation, this will directly improve the life cycle economy of LFP batteries and improve product gross profit margin; in downstream markets such as energy storage and ships, the sales link presents the characteristics of large demand fluctuations, large number of projects, but low single-time purchases. The demand for generalization of prismatic lithium iron batteries has increased, especially in the communication energy storage and industrial energy storage links. Modularization will help accelerate the application speed of downstream enterprises; the technical threshold of iron-lithium materials in the LFP battery market has been lowered, the market scale has expanded, and the application scenarios With a more abundant trend, product models will gradually be unified, sales prices will be further reduced, and enterprise production efficiency and production scale will be further improved; because of the production cost of LFP materials, electricity costs account for a relatively high proportion. Companies such as those in Chengdu, Chongqing, and Guanzhong are setting up factories in the regions of Chengdu, Chongqing, and Guanzhong, and iron-lithium materials companies can find a balance suitable for their own development based on the difference in electricity prices in various regions. At present, my country's Chengdu-Chongqing, Yunnan-Guizhou and Inner Mongolia regions have low electricity prices and a complete chemical raw material base, which can support enterprises to undertake part of the transfer of production capacity.

6 Conclusion

    Entering 2021, there is no doubt that LFP batteries will open up more space in more diversified market applications. Cost and safety will continue to be the first factors that battery suppliers need to consider in a variety of battery application scenarios, and the advantages of LFP batteries are gradually emerging. In the comprehensive electrification of the power system, the trend of comprehensive electrification of land transportation vehicles is irreversible; the electrification of ships is also accelerating, and relevant standards are gradually improved; the field of energy storage, including large-scale energy storage integrated with the power grid and represented by 5G base stations. The small-scale energy storage will continue to be the second battlefield for LFP batteries, and these will be the application markets for LFP batteries. In addition, in emerging application markets, including electric forklifts, electric mopeds, data center backup power, elevator backup power, medical equipment power supply and other scenarios, all will bring certain opportunities and space for LFP batteries. It is foreseeable that the application range of LFP batteries will rapidly expand in the future, and its position in the power battery market will be strengthened.