Currently, the mainstream power batteries are still lithium iron phosphate batteries and ternary lithium batteries.
Compared to ternary lithium batteries, lithium iron phosphate batteries do not contain precious metals such as cobalt and nickel, giving them two major cost advantages—inexpensive raw materials and cheaper processing. From 2014 to 2019, the cost of lithium iron phosphate batteries in China decreased by approximately 60%-70%; in 2020, the price of lithium iron phosphate battery packs was about 15% cheaper than that of ternary lithium batteries.
However, lithium iron phosphate batteries have a drawback: relatively low energy density. Multi-element lithium batteries, on the other hand, offer advantages such as higher energy density and longer driving range.
Since the government adopted a targeted subsidy policy in December 2016, shipments of ternary lithium batteries have increased significantly. From 2018 to the first half of 2020, the market share of ternary lithium batteries in China continued to climb, increasing from 54% to 72%, while the installed capacity share of lithium iron phosphate batteries decreased from 37% to 27%.
Since the second half of 2020, lithium iron phosphate batteries have seen a resurgence due to their safety features. However, many market analysts believe that while lithium iron phosphate batteries have their own suitable applications, in the long run, high-nickel, low-cobalt ternary lithium batteries represent the future development trend.
From a cost perspective, as the proportion of high-nickel batteries increases, the cost of battery pack materials per GWh of battery decreases, especially the reliance on cobalt sulfate, which accounts for a significant portion of the cost. Currently, ternary lithium batteries have evolved from the earliest NCM111 to NCM523 (5-series), NCM622 (6-series), NCM712 (7-series), NCM811 (8-series), and NCM9/0.5/0.5 (9-series), with the nickel content increasing in stages.
Ronbay Technology Chairman Bai Houshan predicts that by 2030, the cost of high-nickel batteries will be comparable to, or even lower than, that of lithium iron phosphate batteries.
