Top 4 Trends Impacting the Global Lithium Iron Phosphate Battery Market Through 2020: Technavio
Technavio’s latest report on the global
lithium iron phosphate battery market provides an analysis on
the most important trends expected to impact the market outlook from
2016-2020. Technavio
defines an emerging trend as a factor that has the potential to
significantly impact the market and contribute to its growth or decline.
Sayani Roy, a lead analyst from Technavio, specializing in research on energy
storage sector, says, “The global market for lithium iron
phosphate battery is expected to grow an impressive CAGR of around 21%
during the period 2016-2020. The growth is primarily driven by the
global demand for EVs and HEVs increasing year on year and also the rise
in consumer
electronics and renewable power.”
APAC is the fastest-growing region for the lithium iron phosphate
battery market. It is expected to account for more than 53% of the
market by the end of 2020.
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The top four emerging trends driving the lithium iron phosphate battery
market according to Technavio energy
research analysts are:
-
Increased demand from China
-
Heavy investments in lithium iron phosphate manufacturing plants
-
Operational challenges of lead acid batteries
-
Technological advancements
Increased demand from China
A large portion of lithium iron phosphate battery consumption is
attributed to China. The reason for this high demand is the significant
increase in the usage of battery-operated vehicles in China. Also, China
accounts for nearly 40 percent of the global lithium iron phosphate
battery market. The country has nearly 95 percent of the rare earth
lithium metals that could increase the lithium iron phosphate production
in the coming years. The increased demand from China is expected to be
the major trend in the global lithium iron phosphate battery market
during the forecast period.
In 2014, Mainland China chronicled a total capacity of about 30,000 tons
of lithium iron phosphate. The major companies included Guanghan Mufu
Lithium Power Materials Co., Pulead Technology Industry Co., and Tianjin
STL Energy Technology Co. etc., which contributed a collective capacity
of 9,500 tons. Besides, there are several planned and long term lithium
iron phosphate projects in China. For instance, Tianjin STL Energy
Technology intends to expand its lithium iron phosphate capacity to
10,000 tons within 3 years. Pulead Technology's Base in Qinghai is
planning to construct a 5,000 tons/annum lithium iron phosphate and
other cathode materials project.
Heavy investments in lithium iron phosphate manufacturing plants
Extensive investment is required for carrying out research activities
for the development of lithium iron phosphate (LFP) batteries. As a
result, the ROI for these applications takes a long time. This results
in most battery manufacturers being dependent on government funding to
expand their facilities. Countries such as South Korea, Japan, and China
are the leading producers of lithium iron phosphate batteries because
the governments in these countries support eco-friendly and green
technologies. Companies such as A123 Systems, BYD, and Formosa are the
leading players in the market that continuously upgrade their lithium
battery manufacturing technologies. For instance, BYD and the State Grid
Corporation of China launched the world's largest lithium iron
phosphate battery grid storage facility in China in 2012.
Sud-Chemie AG, a global chemical company based in Munich, is investing
$75 million in the manufacturing of lithium-iron phosphate, a
high-performance energy storage material used in batteries for electric
vehicles.
Hence, the increased investment in lithium iron phosphate batteries is
another major trend that is anticipated to drive the growth of the
global lithium iron phosphate battery market.
Operational challenges of lead acid batteries
Along with Li-ion batteries, lead acid batteries are widely used in renewable
energy-based projects. To increase the performance of lead-acid
batteries, the US government has established a lead-acid battery program
for ESS in renewable-based ESS. However, the increasing consumption of
lead-acid batteries for big and large ESS leaves deposits on negative
(-ve) electrodes and hinder the performance of ESS. These deposits are
formed by lead sulfate crystals, and are deposited on the plates as a
normal chemical reaction, which results in flow electron. This is the
main reason of lead-acid batteries not being used widely in grid-scale
energy storage.
In addition, these batteries are heavy, have a poor energy density
ratio, and cannot be stored in discharged condition. They can cause loss
of electrolyte in non-sealed batteries at higher temperatures, and high
charging rates, thereby reducing battery performance. All these factors
negatively affect the growth of the lead acid battery market and build a
stronger case in favour of Li-ion battery in applications, such as EVs,
HEVs, UPS, and energy storage etc.
Technological advancements
Over the years, there have been several developments in technology, such
as the usage of nanophosphate lithium ion batteries. This rechargeable
battery technology has high power and energy density, combined with
excellent safety performance and an extensive life cycle. “In recent
years, numerous vendors have started using lithium iron phosphate
batteries in EVs and consumer electronics applications to avoid the
problems related to batteries such as a shorter life span and
capacity/size ratio issues,” says Sayani.
Nanophosphate lithium ion batteries also reduce the total cost of
ownership for a number of applications such as micro hybrid vehicles,
EVs, telecommunications backup, and lead acid replacement applications.
These advances in technology are expected to elevate the growth of the
global lithium iron phosphate battery market.
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