As the electric vehicle market matures, future growth momentum will come more from the mass market. In order to meet this demand, battery factory construction is also considering turning to lithium iron phosphate batteries (LFP), which have lower costs and better performance. European car companies have keenly observed this changing trend in the market, and lithium iron phosphate batteries are expected to gradually rise in the European market and become a new mainstream choice.
ACC, a company jointly established by European auto giants Mercedes-Benz, Stellantis and Total Energy, is considering shifting its production capacity to lower-cost lithium iron phosphate batteries (LFP) due to slowing sales of electric vehicles and cost considerations. ACC originally planned to invest 7 billion euros to build three battery factories in Europe, but the factory projects in Germany and Italy have been suspended.
Industry experts pointed out that one of the main reasons for the slowdown in the growth of electric vehicles in Europe is the high cost of power batteries, which leads to high vehicle prices. Lithium iron phosphate batteries are favored because of their low cost and high safety. Chinese companies have technical and supply chain advantages in the field of lithium iron phosphate batteries, and leading companies such as CATL and BYD continue to launch high-performance products.
More than 90% of the world's lithium iron phosphate battery production capacity comes from China. It is expected that more car companies will choose lithium iron phosphate batteries in the future, not only in the Chinese market, but also in the world to promote more cost-competitive models.
Driven by strong downstream demand and the rapid commercialization of lithium iron phosphate batteries in China, Korean battery giants LG New Energy, SK on, Samsung SDI and others have adjusted their strategies and increased their investment in lithium iron phosphate batteries. This shift indicates that the power battery industry is following the changes in market demand, and the technology and large-scale application of lithium iron phosphate batteries will usher in a new climax.
Industry experts pointed out that as the performance of lithium iron phosphate batteries gradually approaches that of ternary lithium batteries, and at the same time the cost advantage is obvious (up to 20%-30%), it is expected to be widely supported in the global market including Europe. In this process, China, as the global leader in lithium iron phosphate batteries, and its battery companies will play a more important role in the global wave of automobile electrification.
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