Lithium price is rising and LFP is overtaking the NMC market.

A competitive dynamic between LFP and NMC batteries is heating up. Because of the advantages of safety, long lifecycle, and cheaper prices, EV manufacturers are beginning to accept the trade-off of lower energy density when using LFP batteries, according to both companies. In the Global Market, the lithium price is rising exponentially and LFP is taking over the NMC market.

Do you know why lithium price is rising in India?

The battery energy storage system (BESS) market has already accepted LFP, where energy density is a less important aspect.

According to CEA, LFP outsold NMC among batteries sold by Chinese manufacturers, and its market share grew during the year. 44% of 100GWh of lithium batteries used for EVs and ESS were NMC, with the majority of the rest being LFP.

According to Wood Mackenzie, the advantages of LFP over the more mature market technology of NMC make it an appealing option in both power and energy applications.

The battery market’s supply chain challenges are unlikely to improve in 2022, according to the group, especially as EV demand rises in response to rising oil prices and the continued raw materials commodities shortage. Nonetheless, according to Wood Mackenzie analysts, many more major plant announcements are expected this year.

According to Wood Mackenzie analyst Jiayue Zheng, about 80% of lithium-ion battery demand comes from the EV sector, with zero-emissions transportation laws pushed out in response to rising fuel costs “driving demand for lithium-ion batteries to explode.”

Last year, the market experienced shortages due to a combination of increased demand and raw material pricing, according to Zheng.

It will be an issue of figuring out tactics to compete for battery supply with EVs or diversifying their technologies to get around the challenge for stationary energy storage, which Clean Energy Associates predicts would account for around 13% of the entire lithium battery market’s demand by 2030.

CATL, a major supplier to the BESS industry and one of the first to mass-produce LFP batteries, has endorsed sodium-ion technology as a viable alternative and has committed to commercializing it.

Altris, a Swedish sodium-ion battery technology business, announced yesterday that European battery manufacturing startup Northvolt was among the investors in a EU9.6 million (US$10.6 million) Series A fundraising round. Reliance New Energy, a major Indian sustainable energy firm, has also invested in sodium-ion, purchasing Faradion, a UK sodium-ion battery startup.

Rising Lithium Price: A major share of lithium cells in India is coming from China and Hong Kong

According to Ministry of Mines statistics, India imported lithium cells and batteries worth INR8,984 crore in the previous fiscal year, including rechargeable li-ion type products.

Non-rechargeable lithium devices accounted for INR173 crore, whereas lithium-ion items accounted for INR8,811 crore.

The main sources of imports were China and Hong Kong, with China sending 72.73% of the lithium-ion items and 32.05% of the non-rechargeable lithium cell gadgets to India. Hong Kong items made up 23.48% and 37.32% of those markets, respectively.

With products utilized in renewable energy storage facilities and electric vehicles, as well as data centers and consumer gadgets, Indian lithium battery demand is likely to soar.

The government intends to promote local battery manufacturing and has launched a production-linked incentive program of INR18,100 crore to encourage the construction of factories capable of generating 50GWh of advanced chemistry battery cells. At the same time, the government is striving to obtain lithium from countries like Australia and Bolivia, as well as exploring domestic lithium reserves.

Indian Govt. is searching for Lithium presence in India to counter the rising lithium price

The Atomic Minerals Directorate for Exploration and Research, which is part of the Department of Atomic Energy, is looking for lithium in the Karnataka districts of Mandya and Yadgir. Preliminary studies in Mandya’s Marlagalla area have revealed the presence of roughly 1,600 tonnes of lithium.

LFP will dominate the lithium battery market by 2030

Lithium Cell Manufacturing Capacity

In a global market with demand surpassing 3,000GWh by 2030, lithium iron phosphate (LFP) will overtake nickel manganese cobalt (NMC) as the dominating battery chemistry by 2028.

That’s according to a recent report from Wood Mackenzie Power & Renewables on the lithium-ion battery manufacturing business.

China’s CATL and South Korea’s LG are the top two manufacturers expected to increase the most production capacity this decade.

By 2030, CATL plans to have 800GWh of yearly production capacity online.

The top 15 firms alone added 200GWh of new production lines in 2021, bringing total manufacturing capacity to 600GWh by the end of last year.

To date, China’s manufacturers have stated intentions to construct around 3,000GWh of capacity. As a result, the Asia-Pacific region will continue to lead the market, with 5,500 GWh of production capacity set to come online at 300 sites by 2030, although Europe and the United States will have eaten into its share by then.

By 2030, the Asia-Pacific area will account for only 69 percent of global battery manufacturing, with China accounting for the majority of this. At that point, according to Wood Mackenzie, Europe will have a 20% stake.

 China had a share of around 75% of worldwide battery cell production capacity in 2020, falling to 66% by 2030, as opposed to Wood Mac’s reporting of Asia-Pacific region percentage.

According to Benchmark Mineral Intelligence, Europe is on course to have 27 gigafactories by 2030, with 18 separate manufacturers accounting for 789.2GWh of capacity, or 14% of the global total market.