Battery Safety First, Lithium Iron Phosphate Makes a Comeback

Chinese battery makers are more focused on the proposition of making batteries safer than on launching cutting-edge technology.

South Korea, which is currently at the forefront of battery technology, has introduced cutting-edge car batteries that contain varying percentages of nickel-cobalt-manganese ternary lithium batteries, but the drawbacks of these batteries are clear - they are not safe enough and tend to heat up and burn. In addition, materials such as cobalt are expensive and difficult to source, and in the long run do not meet the requirements of sustainable development.

Another older battery formula is lithium iron phosphate batteries composed of lithium, iron and phosphate. These materials create a larger but safer battery.

More than a decade ago, some analysts have predicted the imminent demise of lithium iron phosphate batteries. Because although lithium iron phosphate batteries are cheaper and safer than other alternatives, but they are large, low voltage, can not meet consumer demand for a longer range.

The ternary lithium battery in theory can solve these problems. So many battery manufacturers turned to the road of increasing the nickel content in the battery to achieve longer battery life and higher energy density. During the honeymoon period of the ternary lithium battery market, many people also predicted that by 2018, ternary lithium batteries will occupy three-quarters of the market.

But that didn't happen. Instead, the cost of ternary lithium batteries remains high, and there have been successive fires due to overcharging and overuse.

Even though reality has hit hard, many large battery manufacturers have been reluctant to admit that ternary lithium battery technology, which takes into account cost, high range, high energy density and safety, is now only on paper. So many battery manufacturers continue to march in the direction of ternary lithium batteries without fully evaluating how to finance, research and development.

But ternary lithium batteries seem to have slowly fallen out of favor, and at the same time the Chinese battery manufacturers are making a comeback with lithium iron phosphate batteries.

Now many car companies, including Tesla, have begun to use Chinese battery manufacturers BYD, Ningde Time to provide lithium iron phosphate batteries - based on an improved version of the old lithium iron phosphate battery with decades of history before.

The battery technology is more conservative and safer, and will also be mass-produced in millions of electric vehicles, including Volkswagen and Hyundai's electric cars.

Lower cost lithium iron phosphate market share over ternary lithium.

According to McKinsey's analysis, ternary lithium batteries are much more expensive relative to their raw materials, with a premium of nearly 80%, which also brings higher production costs. BYD and other companies introduced lithium iron phosphate technology is able to reduce the cost of about 20%.

China's lithium iron phosphate battery currently has a cost advantage

In addition, lithium iron phosphate batteries have a key safety advantage: if one of the cells fails, the heat generated is much lower than that of ternary lithium batteries. In most thermal runaway situations (when the temperature inside the cell starts to accelerate), LiFePO4 cells will only smoke and not catch fire because they are more stable.

In March 2020, BYD launched the blade battery, the entire battery is thinner and lighter, energy density of 140Wh/kg. generally speaking, the old lithium iron phosphate battery energy density of 100Wh/kg, nickel-rich ternary lithium battery energy density of more than 200Wh/kg. it can be said that the blade battery in the advancement of lithium iron phosphate energy density has taken a significant step forward. A step forward.

In terms of battery safety, China's battery manufacturers are not afraid to slow down. BYD claims that the blade battery has passed extreme test conditions such as being crushed, bent, heated to 300°C in an oven and overcharged by 260% - these test conditions, the blade battery did not catch fire or explode. On the other hand, BYD's arch rival Ningde Times is also focusing its R&D on safety, using aerospace-grade materials and developing more short-circuit-resistant, high-stability batteries.

In addition, the Chinese authorities' policy guidance is also quite forward-looking. 2016 China Electric Vehicle Power Battery White List, which was entered by all Chinese battery companies - a move that effectively suppressed Korean ternary lithium battery manufacturers such as Samsung SDI and LG Chem. The facts also prove that ternary lithium batteries are indeed far less safe than lithium iron phosphate batteries - from 2018 to 2020, the proportion of electric vehicle safety accidents caused by ternary lithium batteries and lithium iron phosphate batteries will be about 60% and 11%.

According to Bloomberg New Energy Finance, this year lithium iron phosphate battery market share exceeded that of ternary lithium batteries for the first time since 2019. Electric vehicle leader Tesla will be equipped with lithium iron phosphate batteries in all standard range versions of the Model 3 - which has led other automakers to follow suit. Some analysts expect that the market share of lithium iron phosphate batteries will further expand in the future.

Lithium iron phosphate is expected to occupy the largest market share (the blue part of the figure for lithium iron phosphate market share)