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Global installed capacity of lithium iron phosphate batteries will account for 60% in 2024: TrendForce

TrendForce estimated that the installed capacity of the global power battery market will exceed 60% by 2024. TrendForce said that from the perspective of China, the world’s largest electric vehicle market, the power battery market will reverse in 2021.

Lithium iron phosphate batteries officially surpassed ternary batteries with 52% of the installed capacity. The installed capacity in the first quarter of this year the proportion continued to rise to 58%, and the growth rate was much faster than that of ternary batteries.

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However, from the perspective of the global electric vehicle market, thanks to the increase in the penetration rate of new energy vehicles in Europe and the United States, ternary batteries will still have a market share of more than 60% in 2021, far exceeding lithium iron phosphate batteries, which have a market share of about 32%. 

Although there is still a large gap, according to the production capacity planning of global new energy battery cathode material manufacturers in the past two years, the scale and speed of expansion of lithium iron phosphate materials will far exceed that of ternary materials. 

According to TrendForce’s survey, the planned expansion projects announced by global cathode material manufacturers are concentrated in China and South Korea. The nominal total planned production capacity exceeds 11 million tons, of which the planned production capacity of lithium iron phosphate cathode accounts for about 64%.

The production capacity has exceeded the market demand. In the future, there will be a certain gap between the total planned production capacity of the industry and the actual production capacity. It remains to be seen how much the actual effective production capacity can reach in the future.

It is worth noting that with the rise of core battery raw materials such as lithium, cobalt, and nickel since the second half of 2021, the global power battery supply chain is affected by uncertain factors such as the conflict between Russia and Ukraine, the epidemic situation, the supply of the industrial chain in the short term will not match.

There will be a gap in the growth rate of demand, and companies will focus more on reducing the cost of battery materials and supply chain security, two major issues related to future competitiveness.

Under this trend, TrendForce expects that the cost-effectiveness advantage of lithium iron phosphate batteries will become more prominent, and may become the mainstream of the terminal market in the next 2 to 3 years. The global installed capacity ratio of lithium iron phosphate batteries and ternary batteries will also increase in the year 2024 changing from 3:7 to 6:4.

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