As top global players, Korean manufacturers, who once dismissed phosphate-based batteries, have now set aside their inherent arrogance and prejudices. They are not only making a big foray into lithium iron phosphate (LiFePO4) but are also targeting lithium manganese iron phosphate (LMFP).
According to Korean media reports, Samsung SDI recently showcased its lithium manganese iron phosphate battery products for the first time at the Munich Motor Show in Germany. Prior to this, Samsung SDI primarily produced high-nickel ternary batteries, and this presentation of the lithium manganese iron phosphate battery marks a diversification of Samsung SDI's product portfolio.
It's worth noting that a Chinese material manufacturer plans to invest in building a production base for lithium manganese iron phosphate cathode materials in South Korea, with an annual capacity of 20,000 tons and an investment of no more than 642 million yuan. This production line will also be compatible with lithium iron phosphate products. When the investment project is completed, it will potentially become the first large-scale manganese iron lithium factory for Chinese lithium-ion cathode material companies overseas.
It is understood that the Korean base of this material manufacturer has successfully started production this year, achieving batch shipments in the hundreds of tons. Additionally, the company's mixed products of ternary and manganese iron lithium, known as M6P, will be gradually promoted to overseas markets along with the construction of the Korean base. The company's battery customers in Korea include Samsung SDI, as well as LG New Energy and SK On, among others.
Phosphate-Based Batteries Accelerate Deployment
Currently, a multitude of companies in the Chinese lithium-ion battery industry chain, including CATL, BYD, EVE Energy, Gotion High-Tech, Funeng Technology, Hive Energy, Ripuwulanjun, Xingheng Power, Defang Nano, Danshen Technology, Rongbai Technology, Pengxin Resources, Hezong Technology, and Baichuan Shares, are actively positioning themselves in the lithium manganese iron phosphate sector.
Lithium manganese iron phosphate is a "genetically modified" variety of lithium iron phosphate, with the addition of manganese elements. It offers 15-20% higher energy density compared to lithium iron phosphate. The price cost of industrialized lithium manganese iron phosphate is similar to that of lithium iron phosphate. It exhibits safety performance similar to lithium iron phosphate, passing various safety tests, such as nail penetration and impact tests.
In August of this year, in the 374th batch of the National New Energy Vehicle Product Catalog issued by the Ministry of Industry and Information Technology, two electric vehicle models launched in cooperation between Chery and Huawei under the pure electric brand "Zhijie S7" and two high-end pure electric vehicle models under Chery's high-end pure electric brand "Xingtu" will all be equipped with NCM+Lithium Manganese Iron Phosphate (M3P) battery packs from CATL. Additionally, the NCM+Lithium Manganese Iron Phosphate (M3P) battery from CATL is expected to be installed on Tesla Model 3 in the third quarter of this year.
It's worth noting that there have been reports that BYD began small-scale procurement of lithium manganese iron phosphate materials in early 2022. Industry experts predict that BYD's lithium manganese iron phosphate products will be available in the first half of 2024 and are eagerly awaited by the industry.
According to calculations by China International Capital Corporation, as a potential substitute for lithium iron phosphate and NCM 5-series batteries, demand for lithium manganese iron phosphate batteries in the electric vehicle sector is expected to reach 56 GWh by 2025, with demand for lithium iron phosphate and NCM composite solutions reaching 28 GWh, resulting in an overall demand of approximately 84 GWh.
With Korean battery manufacturers joining the fray, the lithium manganese iron phosphate market is poised for a resurgence. Prior to this, Korean manufacturers had already made deep inroads into the lithium iron phosphate field.
Korean Battery Manufacturers Shake Up the Market
Korean manufacturers have been long-standing rivals of Chinese battery companies. The "Korean Big Three" of power batteries, Samsung SDI, LG Energy Solution, and SK On, each possess significant capabilities.
According to SNE Research data, in the first half of this year, the combined global installed capacity of LG Energy Solution, Samsung SDI, and SK On in power batteries reached 72.6 GWh, with a market share of 23.8%, all ranking in the top 10 globally. Among them, LG Energy Solution ranked third globally with an installed capacity of 44.1 GWh, while Samsung SDI and SK On ranked fifth and seventh with installed capacities of 15.9 GWh and 12.6 GWh, respectively.
In recent years, these three companies have been active in the field of lithium iron phosphate and related products.
Before unveiling its lithium manganese iron phosphate products, the head of Samsung SDI revealed earlier this year that the company was trying to develop lithium iron phosphate batteries to diversify its business and customer base. In June of this year, the company showcased its lithium iron phosphate battery products to the public for the first time. Recent reports suggest that Samsung SDI plans to build South Korea's first lithium manganese iron phosphate battery production line at its Ulsan plant.
As the strongest player among the "Korean Big Three," LG Energy Solution began researching lithium iron phosphate battery technology at its Daejeon laboratory in Korea at the end of 2020. In July of last year, LG Energy Solution announced plans to produce lithium iron phosphate batteries at its LG factory in China by 2023. According to foreign media reports, LG Energy Solution will promote cooperation with Tesla by mass-producing lithium iron phosphate batteries in the United States.
SK On is also not to be outdone. In November 2021, SK On was already developing lithium iron phosphate batteries for electric vehicles. SK On's CEO stated that lithium iron phosphate batteries excel in cost, safety, and lifespan, which is why more and more automakers are increasing their demand for lithium iron phosphate batteries. This is a key reason why SK On decided to develop lithium iron phosphate batteries.
In recent years, with the widespread adoption of models from Tesla and BYD, the penetration rate of lithium iron phosphate batteries has rapidly increased, surpassing that of ternary batteries in the Chinese market. Tesla CEO Elon Musk has stated that Tesla will gradually transition to using lithium iron phosphate battery solutions, with two-thirds of Tesla vehicle models in the future expected to be equipped with lithium iron phosphate batteries.
In addition to Tesla, Volkswagen announced plans to mass-produce "standard cells" that are 50% lower in cost than current cells in 2023, with entry-level models using lithium iron phosphate batteries. Furthermore, in recent years, international automakers such as Ford, Hyundai, Renault, Mercedes-Benz, and General Motors have all expressed consideration for using or expanding the use of lithium iron phosphate batteries.
Currently, the global lithium iron (manganese) phosphate market is nearly monopolized by Chinese manufacturers. However, Korean manufacturers are determined to compete with Chinese companies, and the phosphate-based battery sector will no longer be exclusive to China. A battle for market share is inevitable.
Request a Quote
