On January 15th, according to Reuters, SK On, a South Korean battery giant and the fifth-ranked global power battery producer for electric vehicles, plans to commence large-scale production of Lithium Iron Phosphate (LFP) batteries as early as 2026. SK On intends to supply these batteries to several automotive manufacturers.
Choi Young-chan, CEO of SK On, stated, "The company is in negotiations with some major traditional automotive manufacturers or original equipment manufacturers (OEMs) seeking to establish LFP battery supply agreements."
This marks the first time SK On has disclosed detailed information about its LFP battery strategy and production timeline. However, SK On did not reveal which automotive manufacturers it is supplying.
Nearly 70% of electric vehicles use LFP batteries
The shipment volume of LFP batteries surpassed ternary batteries as early as July 2021. In that month, the domestic shipment volume of LFP batteries reached 5.8 GWh, while ternary battery shipment volume was 5.5 GWh.
Since then, the position of LFP batteries in the electric vehicle battery market has steadily risen. In the entire year of 2023, the domestic shipment volume of LFP batteries reached 261.0 GWh, while ternary batteries only amounted to 126.2 GWh.
In other words, almost 70% of new energy vehicles are equipped with LFP batteries.
Not only in the domestic market but also internationally, companies including Tesla, Rivian (dubbed the "Tesla killer"), Volkswagen, Hyundai, Daimler, Ford, Stellantis Group, and even Apple, are favoring LFP batteries.
The global expansion of the LFP industry is evident, with eight American companies announcing plans to invest in LFP battery and material factories, totaling over 84.1 billion Chinese Yuan.
These companies include Ford, LG Energy Solution, CATL, American Battery Factory (ABF), FREYR Battery, OUR NEXT ENERGY (ONE), ICL Group, and Kore Power.
Notably, in October of this year, there were reports that Qing Shan Holdings would invest in building a 120,000-ton LFP factory in Chile, reflecting the global participation in the LFP industry.
South Korean lithium battery giants have also made strategic moves
Compared to SK On, which has revealed its LFP battery production schedule, the other two South Korean battery giants are more proactive.
Ranked second globally and first in the non-Chinese global power battery shipment ranking, LG Energy Solution announced at the end of 2021 that it was expected to build an LFP battery pilot line as early as 2022. LG Energy Solution's LFP batteries are reported to be in pouch cell form.
By May 2022, there were reports that LG Energy Solution plans to start production of standard-sized LFP batteries from October 2023.
The latest news is that LG Energy Solution, in collaboration with Huayou Cobalt, is jointly building an LFP battery factory in Morocco, scheduled to start production in 2026.
LG Energy Solution's clients include Tesla, Volkswagen, Hyundai, Ford, and others.
As for Samsung SDI, ranked seventh globally in vehicle shipment volume, the company showcased Lithium Manganese Iron Phosphate batteries at the Munich Motor Show in September 2023, targeting the high-performance battery market for LFP batteries.
It is understood that Samsung SDI will build Korea's first LFP battery production line at its Ulsan plant.
Samsung SDI's clients include BMW, Audi, Rivian, Fiat, and others.
As of now, among the top 10 global power battery installation volumes, only Panasonic has not explicitly stated its position on the deployment of LFP batteries.
Conclusion
Due to its superior safety and lower cost resulting from easier access to raw materials compared to ternary batteries, Lithium Iron Phosphate batteries are gaining popularity worldwide.
This trend is evident in the field of new energy vehicles, and especially in energy storage, where LFP batteries are shining brightly.
Although LFP material prices have been declining since 2023, affecting the performance of some companies, the expansion of LFP material production remains robust. This reflects the market's sustained optimism towards the technological path of Lithium Iron Phosphate.
Lithium Iron Phosphate is becoming globalized, and the future looks promising!
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