“The BYD blade battery has pulled the LiFePO4 back from marginalization with its own efforts.“
A few days ago, at the 2021 China Automotive Chongqing Forum, Wang Chuanfu expressed the above views in his speech. Behind the words, although it does not rule out its intention to build momentum for its own products, the current battery production capacity of BYD’s Chongqing Bishan plant has reached 20GWh, and it will reach 35GWh by the end of the year.
But what is more reflected is that the LiFePO4 battery that has always been labeled as “low-end” has become the “sweet pastry” of the entire new energy industry, and even has a posture of latecomers. In the past May, the output once surpassed the ternary lithium battery.
In addition to BYD, the successive endorsements of Tesla, Xiaopeng, Weilai and other car companies have also promoted the use of LiFePO4 batteries more quickly. Not long ago, according to relevant news, the technology giant Apple, which is determined to build a car, is negotiating with CATL and BYD on the supply of batteries for electric vehicle projects.
In terms of battery type, it also tends to use LiFePO4 batteries. Although in terms of progress, the negotiations are still at an early stage and it is still uncertain whether an agreement will be reached in the end. But for the advantages of LiFePO4 batteries, Apple obviously also values it. Behind such a choice, it increasingly reflects a result of a trade-off.
The comeback of LiFePO4 batteries also signifies that, to a certain extent, the top new energy brand’s product awareness of pure electric vehicles is gradually improved.
It must be admitted that it is an indisputable fact that LiFePO4 batteries once again stand at the “center of the stage” in the new energy automobile industry.
And just recently, according to the Power Battery Industry Innovation Alliance released monthly power battery data for May 2021, the output of LiFePO4 batteries reached 8.8GWh, accounting for 63.6% of the total output, an increase of 317.3% year-on-year. From January to May this year, the cumulative output of LiFePO4 batteries reached 29.9GWh, accounting for 50.3% of the total output, a cumulative increase of 360.7% year-on-year.
As of the end of 2020, the output of ternary lithium batteries and LiFePO4 batteries accounted for 58.1% and 41.4%, respectively. Nowadays, LiFePO4 batteries have successfully achieved overtake, occupying a higher proportion.
Judging from the latest loading data, in May, the total installed capacity of LiFePO4 batteries was 4.5GWh, a year-on-year increase of 458.6% and a month-on-month increase of 40.9%. The gap with ternary lithium batteries is also shrinking. From January to May this year, LiFePO4 loading volume totaled 17.1GWh, accounting for 41.3% of the total loading volume, a cumulative increase of 456.6% year-on-year.
The substantial jump reflects the hot sales of some models equipped with this battery. Take the domestic Tesla Model 3 as an example. The standard battery life version uses the LiFePO4 battery provided by the Ningde era. In addition, it’s said that the Model Y equipped with LiFePO4 batteries is also on the line and will meet with end consumers in July.
Up to now, after excluding the long-life version and performance version of the ternary lithium battery provided by LG Chem, the sales of these 2 models added can still easily exceed 10,000 in Chinese Market.
The Xiaopeng P7 LiFePO4 version, since its launch in March this year, has also enjoyed strong market demand. Delivery of the model started in May. In the first month, the overall monthly delivery volume of the P7 broke the historical record, which was a 27% increase from the previous month. In other words, the LiFePO4 battery has become the “antidote” for the quantitative change of Xiaopeng P7.
Its CEO He Xiaopeng also stated in the conference call after the first quarter’s financial report: “We are increasingly able to see that the demand for LiFePO4 batteries for the G3 and P7 models is rapidly increasing. We are working hard to increase the production capacity of LiFePO4 suppliers in the second and third quarters. And we hope to meet the demand for LiFePO4 production to a certain extent in the third quarter. In the long run, it is quite confident that the proportion of LiFePO4 will further increase, and the gross profit will also increase.”
As for BYD, thanks to the “blade battery”, after entering 2021, whether it is in the pure electric market or the plug-in hybrid market, the sales level has made very obvious progress. As for Weilai, although it has not officially announced that it will launch a LiFePO4 version of related models, according to related news, it has also applied for a surprising patented technology.
On the whole, it is to combine the LFP LiFePO4 battery with the NCM ternary lithium battery in proportion to make a complete set of battery packs with dual systems.
The influx of the above-mentioned car companies has undoubtedly raised the importance of LiFePO4 batteries to an unprecedented position. As for the essence reflected behind the phenomenon, with the continuous advancement of science and technology, the shortcomings of the present are gradually weakened, and the advantages will be enlarged immediately.
For a long time in the past, the debate about ternary lithium battery or LiFePO4 battery which is better, and which is more suitable for the current development and iteration of electric vehicles, has never subsided. The performance of the two in terms of manufacturing cost, safety performance, comprehensive endurance performance, energy density, etc. are all being directly benchmarked by the outside world. The route dispute between the two parties has even become more and more intense.
However, since last year, the situation has quietly started to reverse. After entering 2021, the overall pattern has become increasingly clear. According to the latest research report released by CICC, the final real penetration rate of LiFePO4 batteries is expected to reach 45%-50%, which means that it will almost evenly share the entire market with ternary lithium batteries.
From the perspective of their respective characteristics, the ternary lithium battery is suitable for users with diverse vehicle environments and has better low-temperature endurance performance than LiFePO4. At the same time, it has a longer battery life. So it is more suitable for car owners who need a long range, ensuring stronger performance and more convenient car experience. Under the same cruising range, compared with LiFePO4, the ternary lithium battery has a higher energy density. Therefore, its weight of the vehicle is lighter, and the performance of lighter weight, power and driving experience is better.
LiFePO4 battery has the following characteristics:
Therefore, it is not difficult to find that the advantages and disadvantages of the above-mentioned two kinds of batteries can actually form a good complement in the terminal market. For many new energy car companies, the cheaper and more durable LiFePO4 batteries are mostly used in entry-level models. Higher-density, longer-range and more expensive ternary lithium batteries are used in the main sales and high-end models.
With the gradual improvement of cognition, it explains why a few years ago, when mileage anxiety was the biggest pain of the entire industry, LiFePO4 batteries could not meet the car needs of most users due to low energy density and insufficient battery life. Therefore, the ternary lithium battery hasn’t many accidents and has become the absolute mainstream.
At present, with the advancement of energy density and manufacturing technology, the endurance of mainstream electric vehicles has generally reached 500-600km. The obsession of users has been basically satisfied, and the safety and stability of the battery system have re-emerged as everyone’s concern, occupying a larger portion. However, LiFePO4 batteries, with their intrinsic characteristics meeting the above-mentioned starting conditions, have begun to have an increasing proportion.
At the same time, facing the raw material market, the prices of some rare metals in ternary lithium batteries have fluctuated widely. In addition, in order to seek a greater degree of quantitative change, various car companies try to reduce costs in order to achieve the purpose of product penetration and facing more potential consumers. Against this background, the cost-effective advantage of LiFePO4 batteries has been highlighted.
“At the right time, we have caught up with the suitable environment and have real terminal demand.” This sentence has already explained why LiFePO4 batteries can return to the mainstream. In this sector, the 2 power battery giants Ningde Times and BYD, undoubtedly become the best among them and have the most “cakes.”
However, the total installed capacity of LiFePO4 power batteries in 2020 is 23.2GWh. Among them, CATL received 13.68GWh, with a market share of 58.9%, occupying an absolute advantage. The supply of the leading auto companies such as Tesla, Xiaopeng, and Weilai mentioned in the article are all undertaken by them. Judging from the relevant financial reports released, LiFePO4 batteries have become a new growth point for the Ningde era to achieve greater profitability.
Even though it has been studying the LiFePO4 battery for many years, and has always taken it as the main technical route, the “blade battery” launched by BYD at this moment is still based on self-production and self-supply as a fixed model. It has not yet achieved large-scale external supply.
The limited sales and audiences of the related models it launched, as well as problems with battery capacity planning, have limited the possibility of making greater breakthroughs in installed capacity. In the direct confrontation with the Ningde era, he never occupied too much advantage. As Wang Chuanfu said at the beginning of the article, it is BYD that has reawakened the market’s attention to lithium iron phosphate batteries, and the Ningde era will undoubtedly get more dividends from it.
As for the end of the article, I keep asking myself a question: The output exceeds the ternary lithium battery, does the lithium iron phosphate battery really win? From this, I still want to say that with the help of several car companies and the increase in installed capacity, LiFePO4 batteries have indeed achieved a certain victory temporarily.
However, it is always unavoidable that the energy density of the single LiFePO4 is close to the theoretical limit, and the subsequent cost reduction of the battery can only rely on the decline in the unit price of raw materials and the effect of scale. As far as the status quo is concerned, the cost of LiFePO4 batteries even has a slight upward trend.
Moreover, if the time axis is elongated, compared with the former which has already faced technical bottlenecks, with the continuous cost reduction of the ternary lithium battery and the self-innovation of the technical level, it will maintain an overwhelming advantage and once again occupy an absolute leading position.
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