Lithium Iron Phosphate Battery Market Trends

Growth Drivers

• Increase in raw material production and global trade: The worldwide demand for critical minerals including phosphate, cobalt, and nickel is set to skyrocket by 400-600% in the upcoming decades the next several decades, while for minerals such as graphite and lithium will surge by over 4,000%, as per a February 2022 fact sheet by The White House. Moreover, it discusses BIL funding of USD 3 billion in refining battery materials and battery recycling facilities, thereby creating more jobs in clean energy production and deployment. Global demand for critical minerals for EVs and solar PVs has been experiencing steep growth.  In total, demand for cobalt rose 70%, lithium tripled, and nickel jumped 40% until 2022.
  
  According to August 2024 data by the World Nuclear Association, 2022 production of lithium globally reached 89 million tons. Bolivia has the largest lithium resources of 21 Mt, followed by Argentina (19 million tons), Chile (9.8 million tons), the U.S. (9.1 million tons), Australia (7.3 million tons) and China (5.1 million tons). Lithium demand in 2020 was 74,000 tons, with 30% from the EV sector and energy storage (22,000 tons). In line with the IEA’s sustainability goals, lithium demand is projected to reach 1,160,000 t by 2040, energy storage and EV accounting for 90% of the total production.
  
  In 2022, lithium batteries were registered as the world's 1069^th most traded item, with an overall trade value of USD 3.43 billion. The exports grew by 4.76% that year, from USD 3.27 billion the previous year, and ascribed to 0.014% of total world trade. China was ranked the top exported with trade of USD 784 million and the U.S. has an import value of USD 430 million. The countries with a greater net export value than imports in 2022 were China (USD 617 million), Indonesia (USD 266 million), Singapore (USD 174 million), Japan (USD 138 million), and Israel (USD 89.2 million). The world trade value of phosphorus was USD 1.23 billion, with top exporters- Vietnam (USD 731 million, 59.2% share of the total trade), Kazakhstan (USD 270 million), the U.S. (USD 65 million), Poland (USD 57.4 million), and Latvia (USD 33.1 million).
• Rising EV market & investments in critical materials: Governments and private entities have stated policies to accelerate EV adoption in the transportation sector. Such private-public commitments indicate 200 million total EVs will be sold by 2030. The world trade value of EVs in 2022 was USD 93 billion and was the 27^th most traded out of 5380, registering an export CAGR of 46.7%. In July 2024, EU and EBRD collaborated to invest USD 102 million to develop green transition manufacturing processes for critical materials.

Challenges

• Hight cost of LiFePO4 battery:  The comparatively high cost of the LFP battery than NCA and NMC is one factor predicted to hamper the lithium iron phosphate battery market growth. The presence of affordable alternatives and persistent R&D in new material chemistry poses a threat of substitution.