LFP batteries set off a tide of expansion

Along with the continued rise in the market share of LFP batteries, various power battery manufacturers have expanded production capacity, advance layout. At the same time, some upstream enterprises who see market opportunities are also moving.

In April this year, in Shanghai Jiaotong University held a new energy and new energy intelligent vehicle entrepreneurs alumni high-end dialogue activities, CATL Chairman Zeng Yuqun has publicly said that because LFP is cheaper, and with the increase in charging pile facilities, the range of new energy vehicles does not need to be so long, in the power battery market, LFP market share will gradually increase, the proportion of ternary lithium batteries will be reduced.

On August 12, CATL announced that it would issue shares to raise up to 58.2 billion yuan for the expansion of 137GWh lithium battery production in five bases. In the outside world, in these new production capacity, LFP or will occupy a larger share.

There is a view in the industry that CATL, which started as a ternary lithium battery, may be challenged in terms of market share due to the ascendancy of LFP. However, according to the China Chemical and Physical Power Industry Association Power Battery Application Branch statistics, CATL in 2020 China's power lithium-ion battery companies LFP battery installed capacity ranking and ternary lithium battery installed capacity ranking are ranked first, LFP market share of 58.9%, ternary lithium market share of 42.16%.

As the "treasure" LFP, the largest player, BYD since last year in the country's power battery projects are almost all LFP blade battery project. Incomplete statistics show that, as of the end of April this year, BYD has built, under construction and planning LFP blade battery capacity is close to 135GWh.

In addition, AVIC, MOTTCELL, Gotion High-tech and EVE Lithium battery industry "second tier" players, is also increasing the investment in LFP projects.

As the domestic LFP materials leader, Dynanonic is busy "not too happy". According to incomplete statistics, from March 2020 to January this year, Dynanonic has announced a total investment of more than 4 billion yuan into LFP production projects.

On July 29, Dynanonic in an interactive response to investor questions, "the company's LFP production capacity of 80,000 tons / year in the first half of the year, in July the new 40,000 tons of production capacity began trial production. With the growing market demand for LFP, companies in the industry are actively expanding production, and the company will also steadily promote the construction of expansion projects."

Some other upstream enterprises also benefited from this. The top two leaders in the domestic titanium dioxide industry, LB Group and CHTI and YONFER in fertilizer industry have recently announced investment in the construction of LFP projects. "At least until 2025, the trend of faster growth of LFP batteries will continue. But considering the current serious M-shaped distribution of automotive consumption, the future is bound to return to the positive state, so in the medium and long term, with the optimization of technology, cost and safety, ternary lithium batteries and LFP will relatively arrive at a stable 1:1 situation." Qi Haikun said.

But the rapid expansion of production capacity has also led to industry concerns. The above-mentioned industry sources pointed out that, on the one hand, the price of raw materials is very large, slow expansion progress, the follow-up fear of serious impact on the growth of the market, thus forming an in-volume competition in the upper reaches; on the other hand, the downstream in order to expand the market, in the absence of increased subsidies in the policy, the terminal selling price of car enterprises will instead decline, thus further squeezing the profit space of battery companies.