Lithium Iron Phosphate Battery Market Size, Share & Industry Analysis, By Type (Portable Battery, Stationary Battery), By Application (Automotive, Industrial, Energy Storage System, Consumer Electronics, and Others), and Regional Forecast, 2024-2032

The global lithium iron phosphate battery was valued at USD 15.28 billion in 2023 and is projected to grow from USD 19.07 billion in 2024 to USD 124.42 billion by 2032, exhibiting a CAGR of 25.62% during the forecast period. The Asia Pacific dominated the Lithium Iron Phosphate Battery Market Share with a share of 49.47% in 2023.

Lithium iron phosphate (LFP) battery is a lithium-ion rechargeable battery capable of charging and discharging at high speed compared to other types of batteries. LFP battery packs provide power density, high voltage, high energy density, long life cycle, low discharge rate, less heating, and increased safety; therefore, various batteries are adopted by multiple applications. The growth is mainly attributed to the improved demand for LifePO₄ batteries in passenger cars, buses, low-speed- electric vehicles, and hybrid electric vehicles due to their safety and low cost.

The outbreak of COVID-19 has hampered the growth of LFP batteries. The growth of LFP batteries is declining due to the pandemic, which has restricted the supply of batteries and other critical components due to severe disruptions in business and the global economy. The key components of batteries are mainly available in the Asia Pacific, especially in China. The country has suffered through massive lockdown owing to the pandemic, impacting the battery manufacturers in Europe and North America.

Lithium Iron Phosphate Battery Market Trends

Rising Trend of Electric Vehicles and Hybrid-Electric Vehicles Owing to Increasing Fuel Prices will Propel the Adoption of LFP Battery

Electric vehicles are a key technology for reducing carbon dioxide emissions from road traffic, which accounts for more than 15% of global energy emissions. The sales of electric vehicles have exploded in recent years with better choice, wider model availability, and better performance. The popularity of passenger cars is growing steadily. China accounted for nearly 60% of all new electric car registrations across the globe in 2022. Electric cars will account for 29% of total domestic car sales in China in 2022, up from 16% in 2021, reaching the national 2025 target of 20% of the new energy vehicles (NEV) 1 sales on time. The demand for Electric Vehicles (EV) and Hybrid Electric Vehicles (HEV) is increasing due to the rise in fuel prices and incentives rolled out by government bodies. The governments across various countries are encouraging the usage of e-mobility to cut down the dependency on crude oil and reduce vehicle pollutions. In 2020, Tesla Inc., an American electric vehicles company, announced that they would be using LifePO₄ batteries, moving away from their traditional Nickel-based batteries.

Growing Renewable Energy Projects to Support Growth of LFP Batteries

The rising awareness towards maintaining a clean environment has propelled the growth of renewable energy projects, such as photovoltaic installation, on-grid solar power backup systems, and nuclear power plants; wind energy projects are driving the growth of LifePO₄ batteries. In addition, the growing usage of energy storage devices is supporting the expansion of LFP batteries.

Lithium Iron Phosphate Battery Market Growth Factors

Increased Adoption of Batteries in Power Grid and Energy Storage Systems to Play a Critical Role

Implementing strict government regulation to regulate rising pollution levels encourages the industries to use LFP batteries. For instance, India's national power sector planning includes two prominent energy storage technologies PSPs and BESS. The government recently published the Energy Storage Systems (ESS) Framework to promote the adoption of energy storage in the energy sector. The framework aims to support the development of the European statistical system through policy and regulatory initiatives, financial incentives, and performance-based incentives.

Some of the notable past practices ratified under this framework include the legal status of an independent ESS, the Energy Storage Obligation (ESO) for mandatory entities such as distribution companies, the transmission network costs, and the eligibility of BESS projects participate in the High Price Day Ahead (HP-DAM) electricity market. Together, these practices can accelerate ESS adoption. For example, the legal status of independent ESS projects in the electricity system enables the deployment of independent ESS projects as an energy storage service.

Worldwide the power industry is working towards producing renewable energy and storing it for the future. Low cost, low-self discharge rate, and minimal installation space are critical factors driving the adoption of LFP batteries in grids and energy storage devices. Since these batteries are more resistant to high temperatures, they are ideal for use in remote areas and thermal control applications.

Falling Prices of Lithium-Ion Batteries Have Catalyzed Adoption in Various Sector

The primary factor restraining the adoption of lithium-ion batteries since 1990 was their prices. Lithium-ion batteries contain many components, and the main element of any lithium iron phosphate battery is its cell, which accounts for 50% of its cost. However, recent developments by lithium-ion manufacturing companies have helped in declining prices of batteries, which will further reduce in the future. The reduction in costs of components and the adoption of advanced technologies to increase battery capacity are key factors that boost the growth and adoption of lithium-ion batteries.

RESTRAINING FACTORS

Growing Demand for Other Batteries Is Hindering the Market Growth

The increasing demand for other batteries, such as lead-acid batteries, sodium- nickel chloride, flow batteries, and lithium-air batteries in consumer electronics, electric vehicles, and energy storage systems is expected to hinder the growth of LFP batteries. In addition, the introduction of new energy devices, such as flywheel batteries, is also restraining the market growth.

Lithium Iron Phosphate Battery Market Segmentation Analysis

By Type Analysis

Portable Batteries Set To Lead Market with Rising Demand from Automotive Sector

Based on type, the LFP battery market is bifurcated into portable and stationary batteries. The portable batteries segment will dominate the market share in 2023 due to the growing adoption of these batteries in the automotive sector. LifePO₄ batteries are widely adopted by the automotive industry in the manufacturing of electric or hybrid electric vehicles. However, the stationary segment will also observe significant growth due to renewable energy storage projects.

By Application Analysis

Growing Demand for Electric Vehicles in Automotive Industry Will Propel the Adoption of LFP Batteries

By application, the market is segmented into automotive, industrial, energy storage systems, consumer electronics, and others. The automotive sector dominated the global LFP battery market. The growing awareness about the benefits of battery-operated vehicles & rising prices of petrol and diesel, specifically in the Asia Pacific, North America, and Europe, has attracted consumers to these electric or hybrid vehicles. In addition, the government bodies are also enforcing the usage of electric or hybrid cars to reduce the dependency on importing crude oil. The growing demand for energy storage devices also promotes the usage of lithium iron phosphate batteries due to their properties, such as less heating and low discharge rate.

REGIONAL INSIGHTS

Geographically, this market is studied across five key regions, including Europe, North America, Asia Pacific, the Middle East & Africa, and Latin America. As per our findings, Asia Pacific will dominate the global market share during the forecast timeframe. China and Japan are considered the world's largest markets of electric vehicles. LFP batteries are widely adopted in the automotive sector owing to their advanced features. They are cheap and provide the highest safety in all LFP battery categories. In addition, the LifePO₄ battery also offers other benefits, such as a longer life span, no maintenance, lightweight, improved discharge, and charge efficiency; subsequently, the Asia Pacific region is considered a key market for LifePo4 batteries. In addition, the growing demand for smartphones, laptops, and other electronic devices in China, India, Japan, and Singapore is expected to boost the market for LFP batteries in the region.

North America witnessed considerable lithium iron phosphate battery market share in the global LFP battery market, with the U.S. leading the region's market. The increasing sales of electronics vehicles and energy storage devices will contribute to the demand for LFP batteries.

The increasing focus of the government bodies towards greenhouse gas emissions in the European region has supported the lithium iron phosphate battery market growth. Several countries in the area, such as Germany, France, and others, have set their target of zero-emission of CO₂ by 2050, helping boost the usage of lithium-ion batteries in the region. The European Commission and the Batteries European Partnership Associations launched a public-private partnership to inspire research into innovative battery technology in Europe.

The Middle East & Africa is likely to witness significant growth as many countries are observing massive construction activities, and cities are developing at a larger scale. This will lead to the necessity of industrial and construction tools that use LFP batteries. Key nations in the regions which are actively operating include South Africa and Gulf Cooperation Council (GCC) countries.

List of Key Companies in Lithium Iron Phosphate Battery Market

The market players in the market such as BYD Company, A123 System, Contemporary Amperex Technology Co. Ltd (CATL), and RELion Batteries are consistently enhancing their batteries to provide a competitive product in the market. The rising trends of LFP batteries in electric vehicles and consumer electronic devices have made the competitors focus on research and development of these batteries to occupy a larger market share.

List of Key Companies Profiled:

• BYD Company (China)


• A123 System (South Korea)


• Contemporary Amperex Technology Co. Ltd (CATL) (China)


• Bharat Power Solutions (India)


• Power-Sonic Corporation (U.S.)


• RELion Batteries (U.S.)


• Electric Vehicle Power System Technology Co. Ltd. (China)


• K2 Energy (U.S.)


• Lithium Werks (U.S.)


• Greensun Solar Energy Tech Co., Ltd (China)


• Britishvolt (U.K.)


• Morrow batteries (Norway)

KEY INDUSTRY DEVELOPMENTS:

• November 2023- Stellantis N.V. and CATL announced that they have signed a non-binding Memorandum of Understanding (MoU) for the local supply of LFP battery cells and modules for the production of Stellantis electric vehicles in Europe. To further support Stellantis' aggressive electric strategy, the companies are considering a joint venture with a corresponding contribution.


• August 2023- Chinese battery manufacturer CATL announced the launch of a new, fast-charging lithium iron phosphate (LFP) electronic vehicle (EV) battery. The company expects mass production of the battery to begin by the end of 2024.


• March 2022- Britishvolt began talks with around 20 major automotive original equipment manufacturers (OEMs) to develop new high-nickel and lithium-iron-phosphate (LFP) batteries serving the passenger and commercial vehicle markets.


• August 2021– The Chinese battery manufacturer CATL invested $15.60 million to establish a new automotive science and technology company based in Shanghai. The CATL is a well-known supplier for LFP batteries to Tesla and Nio.


• September 2021–. The LG Chem’s LG Energy Solution is expected to expand its EV battery offer with LFP, gaining popularity owing to their characteristics. The LG Energy Solution will use LFP in Pouch Format.

REPORT COVERAGE

The report offers qualitative and quantitative insights on the lithium iron phosphate batteries market and a detailed analysis of market size & growth rate for all possible segments in the market.

Along with this, the report provides an elaborative analysis of market dynamics, emerging trends, and competitive landscape. Key insights offered in the report are advancement in technology for LFP batteries by individual segments, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.

REPORT SCOPE & SEGMENTATION