photo = AP The global battery market is fluctuating as Tesla, the world’s largest electric vehicle company, announced on the 21st that it would install lithium iron phosphate (LFP) batteries in all standard models of its vehicles. LFP batteries produced by Chinese companies such as CATL and BYD and nickel, cobalt, and manganese (NCM) batteries produced by three Korean battery companies, LG Energy Solution, Samsung SDI, and SK On, will compete for market share. ? Soaring market share of LFP batteries According to SNE Research on the 22nd, the market share of LFP batteries in the electric car sector in the first half of this year was 24.1%. It increased by about 10 percentage points from the first half of last year (14.8%). This is due to the surge in sales of Tesla Model 3 equipped with CATL’s LFP battery and Woolling Motor’s Hongkwang Mini EV, which cost 5 million won in China. In the same period, NCM622, an NCM family, fell from 22.5% to 22.0%, and NCM523 fell from 19.4% to 16.0%. In the meantime, LFP batteries have been considered to be products used for ‘cheap taste’ only in China due to their short driving range. The industry predicted that NCM batteries with high energy density will become the mainstream for electric vehicles that require a long driving range and a short charging speed. However, as the price of cobalt and nickel, the raw materials for NCM batteries, soared, and automakers such as Volkswagen announced that they would release low-cost electric vehicles, demand for LFP batteries is increasing significantly. Accordingly, European battery maker Eleven ES decided to build Europe’s first LFP battery plant capable of producing 16GWh per year in Serbia. There was even a report on the same day that ‘BYD had won an order for a 10GWh LFP battery from Tesla’. ? Material makers review LFP cathode material production As global demand has increased significantly, domestic companies are also promoting the production of LFP batteries and cathode materials, which are core materials. On the 4th, SK On CEO Ji Dong-seop said, “We are considering LFP battery production.” LG Chem and POSCO Chemical are also actively reviewing the commercialization of LFP cathode materials. If you have been ‘all-in’ for NCM batteries, now you are planning to change your business strategy to two-track. POSCO Chemical said, “We are reviewing plans for commercialization, such as the development of cathode materials for LFP.” LG Chem also said, “We are considering the production of LFP cathode materials.” LFP cathode material technology is not difficult. However, it takes 1 to 2 years to change the process. For this reason, material makers are also considering producing in factories in China or outsourcing them. An industry official said, “There is currently no domestic production, but the advantage of low cost LFP cannot be ignored. ? NCM has an advantage in the mid- to long-term outlook In the battery industry, the demand for LFP batteries will increase in the short term, but NCM batteries are expected to win in the mid to long term. This is why LG Energy Solution and Samsung SDI are not considering LFP battery production. Instead, they decided to produce high-nickel NCM or NCA batteries with a nickel content of 80-90%. The strategy is to focus on increasing the mileage by lowering the price to less than $100 per kWh through technology development. LFP batteries have a disadvantage in that it is difficult to improve energy density due to the limitations of materials. CATL is also known to plan to increase the proportion of NCM battery production in the long term. If the recycling market for waste batteries is activated from around 2027, when the lifespan of electric vehicle batteries, which is 8 to 10 years, is reached, NCM batteries will be advantageous in terms of price. The reason is that “NCM can recover metal at $23 per kWh, while LFP is only $4” (SNE Research). The European Union (EU) plans to mandate the recycling of 12% cobalt and 4% nickel from 2030. At an analyst briefing earlier this month, Tesla also said, “LFP cannot reach the energy density of NCM. “LFP will be used in the field of (low-cost electric vehicles) that can have a short driving range,” he added. The view is that the market will be divided into NCM batteries for mid- to high-end high-performance electric vehicles and LFP batteries that are 10-20% cheaper for low-end electric vehicles. Reporter Kim Hyeong-gyu/Nam Jung-min [[email protected]](/cdn-cgi/l/email-protection)
