Written by / Ma Xiaolei
Editor/ Zhang Linyu
Design / Shi Yuchao
Source/Reuters Author: Hyunjoo Jin, Paul Lienert
Since Musk revealed the news of increasing his stake in Twitter on April 4 and later deciding to acquire it, tesla's stock price fell by 12.2% to $876.42 on April 26, and the market value has evaporated nearly $250 billion in 20 days.
On April 28, Musk announced that he would acquire Coca-Cola.
In addition to these seemingly false news, Tesla has a more important news that seems to be ignored, which concerns the entire automotive industry.
Tesla disclosed that nearly half of the vehicles produced in the first quarter were equipped with lithium iron phosphate batteries (LPPs), which are much cheaper than nickel-cobalt batteries that have long dominated Western countries.
This is the first time Tesla has announced the specific details of the battery composition. It sends a strong signal that iron-based batteries are finally starting to attract global attention.
At this time, Russia, the main producer of nickel, was interrupted by the war, and the Congo, the main source of cobalt, was also controversial due to negative news such as unqualified mining conditions.
Two Aries lithium iron phosphate battery packs are awaiting testing at Our Next Energy's headquarters in Novi, Michigan, ON, April 25, 2022
Tesla isn't the only company betting on LFP batteries, which have long since gained fame in China.
According to Reuters' research and interviews in the field of electric vehicles, there are as many as a dozen companies considering building LFP battery factories in the United States and Europe in the next three years.
"I think lithium iron phosphate has a new life. It has clear long-term advantages in the electric vehicle industry. Mujeeb Ijaz, founder of American battery startup Our Next Energy (ONE), said. The company is considering establishing a production site in the United States.
Jas has worked in this area for a long time, having been chief technology officer at Michigan-based A123, an early producer of LFP batteries that went bankrupt in 2012 and was acquired by a Chinese company.
Jass sees a resurgence of the technology that failed to become popular in the U.S. a decade ago, and he and other LFP advocates argue that richer iron reserves and relatively cheaper prices are key factors in balancing the shortcomings of this category of batteries.
LFP batteries are larger and heavier than nickel-cobalt-manganese (NCM) batteries, and typically they can store less energy, resulting in shorter endurance.
However, in addition to the lower cost, the advantages of LFP also include a lower risk of fire and less loss of life cycle than NCM batteries.
Logo of Our Next Energy (ONE).
According to Benchmark Mineral Intelligence (BMI), in 2022, LFP will account for only 3% of electric vehicle batteries in the United States and Canada, 6% in the European Union, and the rest will be NCM batteries.
Competition is more intense in China, with LPPs accounting for 44 percent of the electric vehicle market and 56 percent of THOSEMs.
For Western LFP battery makers, it may be a long and difficult road to beat Chinese competitors, who account for about 90% of global production.
Caspar Rawles, BMI's chief data officer, said that in the short term, the companies may continue to rely on refined materials from Chinese suppliers.
LFP batteries have a higher lithium content than NCM batteries, and industry experts worry that the historical advantage of lower production costs of iron-based batteries may disappear as the cost of lithium metal rises.
About two years ago, Tesla began using LFP batteries made by the Cataline era in some Model 3s. Tesla has been using LFP batteries in some entry-level U.S.-made versions of the Model 3 since last year, and has expanded the use of the technology beyond China.
Because nickel-cobalt batteries have always dominated the U.S., some analysts and battery experts were surprised when Tesla announced such a large-scale use of LFP batteries in the first quarter and installed them in about 150,000 cars.
Tesla did not respond to comments.
On April 25, 2022, Our Next Energy CEO Mujib Jas stood next to the Aries lithium iron phosphate battery pack in Novi, Michigan, USA, waiting for the test
Mitra Chem, co-founded with former Tesla battery supply chain manager Vivas Kumar, is working on making LFP battery materials. He expects nickel prices to continue to fluctuate due to supply chain issues.
He added: "The safest thing for automakers is to add more iron-based cathodes to their portfolios. ”
U.S. electric car startup Fisker plans to use LFP batteries in its entry-level SUVs, and CEO Henrik Fisker said it is in talks with battery suppliers to start sourcing batteries made in the U.S., Canada or Mexico from 2024 or 2025.
Fisk said that he initially planned to purchase batteries from the CATL era, but considering that local procurement was important, he finally chose to purchase them in North America. Because it is expensive to transport heavy battery packs from Asia, especially for low-cost, mass-production models, it is not necessary. This is also not environmentally friendly, and the CEO added that he believes LFP batteries will have an important place in the global electric vehicle portfolio.
"I think the real strength of LFP will be reflected in urban vehicles." He said, "Electric vehicle owners who live in cities generally have short driving distances. ”
On April 25, 2022, at the headquarters of Our Next Energy in Novi, Michigan, USA, an Aries lithium iron phosphate battery pack is waiting to be tested
After the outbreak of the war in Ukraine, some luxury automakers were also working on the chemical composition, including Volkswagen's Audi, which had not previously used LFP batteries.
Audi CEO Markus Duesmann said in March: "LFP batteries are likely to account for a larger percentage of the fleet until 2025. New situations will emerge after the war. We will adapt to this situation and choose the battery technology and specifications accordingly. ”
BMW's chief procurement officer, Joachim Post, also recently said the company is looking into the advantages of LFP. He added: "We are working on different techniques to minimise the use of resources, and we are also optimizing the chemical composition. ”
As the global electric vehicle market expands, entry-level vehicles and commercial vehicles with lower battery life requirements will use LFP batteries more.
However, to achieve large-scale adoption of LFP batteries, it is necessary to find ways to increase energy density, thereby reducing size, weight, and solving the problem of rising costs of lithium.
Bob Galyen, a former chief technology officer of the Ningde era, said: "The most important thing is to standardize manufacturing without any mistakes. He now runs Galyen Energy, a battery consulting firm.
This article was originally produced by Automotive Business Review
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