EV Battery Market: LFP Chemistry Reached 31% Share In September

The NCM battery chemistry remains the most popular.

Tesla Model 3 (MIC) in China: prismatic LFP and 2170-type cylindrical batteries

Mark Kane

By: Mark Kane

Dec 26, 2022 at 3:02pm ET

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The Lithium Iron Phosphate (LFP) battery chemistry nearly doubled its share in the global passenger xEV (BEVs, PHEVs, HEVs) battery market since January 2021, but it's very China-centric.

According to Adamas Intelligence, LFP's share increased from 17% in January 2021 to 26% in January 2022 and most recently accelerated to 31% as of September 2022. This means that almost a third of all xEV batteries are LFP.

Batteries for commercial xEVs, energy storage systems or other applications are not included in the numbers.

However, the more energy-dense NCM family (nickel-rich cathode) is still the dominant solution with a more than two times higher share. It's unclear whether LFP will be able to beat NCM at some point.

Interesting is that 68% of all xEV LFP batteries deployed through the first nine months of 2022 were deployed by two manufacturers - Tesla and BYD, which by the way are also the two largest BEV and overall plug-in electric vehicle players.

Tesla Model 3 LFP Battery (source: Munro Live)

Tesla Model 3 LFP battery pack (source: Munro Live)

BYD Blade Battery

All of the other manufacturers combined (including other major LFP users like SGMW, GAC, MG, Geely) were responsible for the remaining 32%.

Adamas Intelligence notes that during the first nine months of the year, over 85% of all LFP deployed onto roads globally in newly-sold passenger xEVs were in China. That's quite interesting because it means that the rest of the world is responsible only for 15% and the top markets were: the US (mostly LFP-powered Tesla Model 3 Standard Range), India, the UK and Germany.

If that's not enough to call the LFP very China-centric, it turns out that nearly all of the LFP batteries deployed outside of China were produced in China.

What do you think?

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To further expand the LFP's share, this battery cell chemistry will have to be adopted by other global manufacturers (like Toyota, Volkswagen Group, Stellantis, Ford) and used on a mass scale by the Chinese manufacturers in plug-in vehicles exported globally.

Only time will tell whether the LFP chemistry, considered a more affordable one, will continue its expansion or if we will see the return of the energy density race in the next-generation EVs.