Lithium ferrophosphate (LFP) battery will account for 30% of all batteries in 2030, according to market research firm Wood Mackenzie.
LFP batteries accounted for 10% of the total back in 2015.
Meanwhile, nickel cobalt manganese (NCM) battery will drop from 70% in 2015 to 30% in 2030, the firm said.
Wood Mackenzie said LFP batteries didn’t need nickel or cobalt and was relatively cheaper and this will lead to growth.
Cell to pack (CTP) technology have increased energy density of LFP, allowing for more room within electric vehicles, the firm said.
China’s LFP v South Korea’s NCM
LFP batteries cost 70% to 80% to the cost of NCM batteries and is relatively safer. It is however heavier and has relatively lower energy density.
Chinese companies such as CATL and BYD are pushing LFP batteries. Tesla is adopting the battery for its Model 3 which is helping them to grow.
CTP technology has allowed more travel distance per charge, making them more attractive to car makers.
LFP batteries will also take a bigger piece of the energy storage systems (ESS) market going forward.
Meanwhile, the growth will worry South Korean battery makers that are focused on NCM batteries. They are countering the rise of LFP by using high-nickel anode materials to boost energy density of NCM batteries.
The companies will need to boost performances and decrease cost of NCM batteries to compete better against LFP batteries, a person familiar with the matter said.