Lithium Iron Phosphate Batteries Market is projected to reach USD 35.5 billion in 2028 from USD 17.7 billion in 2023 at a CAGR of 14.9% according to a new report by MarketsandMarkets™.
Lithium Iron Phosphate (LiFePO4) batteries, also known as LFP batteries, are a type of rechargeable lithium-ion battery chemistry. They are composed of a cathode made of lithium iron phosphate and an anode made of carbon. LiFePO4 batteries are known for their high energy density, long cycle life, and excellent thermal stability. The market growth of LFP is driven by substantial need for battery-operated material-handling equipment.
Transition from conventional power generation to renewable generation present promising opportunities for the lithium iron phosphate batteries market. However, the risks associated with disposal of spent lithium-based batteries has hindered the growth of the market in recent years and is expected to restrain the market’s growth during the forecast period.
Based on capacity, the lithium iron phosphate batteries market has been split into 0–16,250 mAh; 16,251–50,000 mAh; 50,001–100,000 mAh and 100,001–540,000 mAh. 50,001–100,000 mAh capacity batteries are expected to grow at the highest CAGR during the forecasted period. These batteries are used in industries where high power capacity is required.
Major applications include EVs, plug-in HEVs, uninterrupted power supply, wind energy storage, electric robot, electric mower, solar energy storage, vacuum cleaner, golf cart, telecom, marine, defense, mobile, and floor machines. The types of batteries made for such high-power applications include lithium iron phosphate, lithium manganese oxide, lithium titanium oxide, and nickel manganese cobalt, and some are made in modular formats. Besides the modular format, the other formats include polymer, prismatic, energy storage systems, and battery packs.
This report segments the lithium iron phosphate batteries market based on voltage into three segments: low (Below 12V), medium (12–36V), and high (Above 36V). The high voltage segment is expected to be the largest segment during the forecast period. These high-voltage batteries are used for powering heavy electric vehicles, industrial applications, power backup, HEVs, energy storage systems, emergency power systems, microgrids, yachts, military, and marine applications.
The batteries cannot be made of a single cell and hence require a module and sometimes an array of modules, power racks, power containers, and others. These systems can be made using lithium manganese oxide, lithium iron phosphate, nickel manganese cobalt, and lithium titanium oxide. The rising sustainability concerns and the consequent transition toward the adoption of EVs are expected to influence the adoption of these batteries, consequently increasing the demand.
Asia Pacific is expected to be the largest lithium iron phosphate batteries market during the forecast period. The Asia Pacific region, comprising major economies such as China, India, Japan, South Korea, and the Rest of Asia Pacific, which have a huge potential for several application areas within the lithium iron phosphate. In recent years, this region has emerged as a hub for automobile production.
Recent infrastructure developments and industrialization activities in emerging nations have opened new avenues and opportunities for OEMs. Additionally, the increasing purchasing power of the population has stimulated the demand for automobiles, which would be a driving force for the growth of the lithium iron phosphate batteries market. Asia-Pacific region has a significant presence in the lithium-ion battery industry, both in terms of battery production and demand. Countries, particularly China, South Korea, and Japan, are major manufacturers of lithium-ion batteries. These countries have a well-established battery industry, with large-scale production facilities operated by companies such as BYD Company Ltd, CATL, CALB, LG Chem, and few other key players. They produce batteries for a wide range of applications, including electric vehicles, consumer electronics, and energy storage systems.
Some of the major players in the lithium iron phosphate batteries companies are BYD Company Ltd. (China), Contemporary Amperex Technology Co., Limited. (China), Gotion, Inc. (US), CALB (China), and A123 Systems LLC (US). The major strategies adopted by these players include product launches, contracts, agreements, and expansions.
Recent Developments
- In August 2022, Lithium Werks Inc. inaugurated the largest North American based Cathode Powder and Electrode production facility for lithium batteries.
- In May 2022, Arun Plus Company Limited and Contemporary Amperex Technology Co., Limited have signed a strategic MOU to explore potential cooperation and development opportunities in battery-related business in ASEAN market.
- In April 2022, BYD Company Ltd. had planned the construction of a new production facility in Zhejiang, China.
- In December 2021, Byd Company Ltd. has released plans to increase battery production capacities in Jiangxi province, China.
