The globalization of lithium iron phosphate batteries is accelerating

Data show that from January to November 2024, China's battery installed capacity maintained rapid growth. Among them, the installed capacity of lithium iron phosphate battery reached 348GWh, accounting for 73.6% of the total installed capacity, an increase of more than 51.5%; Ternary lithium battery installed capacity was 124.7GWh, accounting for more than 26%, an increase of 13.7%.

It can be seen that since the beginning of this year, lithium iron phosphate batteries have performed well in the Chinese market, and the market share of installed capacity in the first 11 months is close to 3/4, highlighting the dominant position; The year-on-year growth rate is 37.8 percentage points higher than that of ternary lithium batteries, indicating its rapid growth. This also reflects the market's high recognition of the performance of lithium iron phosphate batteries and the continued growth of demand.

At the same time, the overseas energy storage market has also opened its door to China's LFP batteries. In June, Yiwei Energy Storage and the United States energy storage system integrator Powin signed a 15GWh lithium iron phosphate battery pack and high-density battery supply agreement; In September, it signed an agreement with AESI, an American energy storage innovation company, to supply 19.5GWh of lithium iron phosphate batteries to the latter in the future.

In September, Grenergy Renovables, an independent power generation company in Spain, expanded cooperation with BYD to increase the purchase of energy storage batteries from the previous 1.1GWh to 3GWh.

Based on this, many overseas battery manufacturers have also seen the huge potential of LFP batteries, and battery companies based on ternary lithium batteries have turned to LFP batteries.

On the demand side, it is predicted that by 2030, the total demand for energy storage batteries in Europe alone will reach 1500GWh, of which about half, that is, 750GWh, will use lithium iron phosphate batteries.

On the supply side, more than 90% of the global lithium iron phosphate battery production capacity is from China. South Korea's SNE Research has said that because Chinese companies already dominate the lithium iron phosphate battery market, they are expected to maintain this situation for some time.

In terms of enterprises, affected by trade barriers to the export of battery products, China's head battery companies will accelerate the pace of "going to sea" of LFP battery production capacity in 2024.

Industry insiders pointed out that in addition to meeting overseas customers' demand for terpolymer lithium batteries, these battery companies themselves have huge advantages in lithium iron phosphate technology, products, and production capacity, and will become the main force of overseas lithium iron phosphate production capacity supply in the future.

At the same time, the battery production capacity "goes to sea", which is conducive to reducing the export tariffs and transportation costs of China's battery products, and further expanding the international market. On the other hand, the acceleration of LFP battery production capacity "to the sea" will help China's industrial chain enterprises consolidate their differentiated competitive advantages over Japanese and Korean battery companies.