Automotive lithium iron phosphate (LFP) battery has hit record high in energy density, and the demand has amplified alongside the production expansion of Tesla. Guoxuan High-Tech plans to manufacture the new batteries starting from the end of 2021, and the Chinese leader in lithium battery, CATL, once again added another RMB 1.8 billion for the factory expansion in Yibin or Sichuan, with a potential production capacity of 80K tons.
The core of electric vehicles lies on battery, which can be roughly divided into two major routes of NCM & NCA, and LFP, though the latter has gradually stripped away from the disadvantage of low energy density, and is progressing towards as the new mainstream.
Simply put, for electric vehicles, the higher energy density of ternary batteries are able to provide larger horsepower and a further driving range under the same weight, though the fatal flaw lies on the proneness of fire and explosion after collision. Owing to a lower degree of energy density, LFP batteries are usually adopted by vehicle models that require less performance, which makes it a safer option, though the status quo may be subverted real soon.
As the largest market of electric vehicles, China is also the biggest manufacturing country in batteries, as well as the leader in LFP batteries, which derived the possibility in battery evolution. Volkswagen invested EU€2 billion in battery manufacturer Guoxuan High-Tech during 2020, which now confirms to be the right move, as the latter announced the new LFP battery yesterday, which has significantly improved on the energy density to 212Wh/kg, and is expected to enter mass production starting from the end of 2021.
Guoxuan High-Tech commented that this will be the LFP battery with the highest energy density in the industry right now, and the key is that the company managed to successfully utilizing two innovative technologies of silicide anode and pre-lithiation, which resulted in the LFP battery drastically exceeding the market mainstream 160 Wh/kg in energy density.
▲Guoxuan High-Tech showcases the new battery. (Source: Guoxuan High-Tech)
The battery technology will be carried to the end battlefield, since Volkswagen currently holds 1/4 of shares in Guoxuan, and this new batch of batteries will be first adopted on ID.3 and ID. 4 when the former initiate official mass production in China. Combining the two, electric vehicles of Volkswagen that are more affordable and stronger in performance compared to Tesla models that are made in China may replicate the victory that they tasted in Europe by 2022.
However, it will probably not go as smoothly as planned. Guoxuan merely has 3.3GWh of battery production in the Chinese electric vehicle market, and is expected to increase the figure to more than 13 GWh in 2021, though it is still trailing far behind CATL at 32GWh last year.
Despite the inability of mass producing LFP batteries with such high density, CATL is backed with a monumental amount of capitals, and had successively invested tens of billions in the second half of 2020 to prepare for new production capacity, where the fire incidents at two of its factories created insignificant consequences.
The latest announcement states that CATL will continue to expand on new factories in Jiang’an County of Yibin through its affiliated Dynanonic (one of the factories that caught fire), and is expected to invest an investment of RMB 1.8 billion. The expansion is estimated to complete within 3 year, and is forecasted in producing 80K tons of LFP raw materials for the production of the corresponding batteries.
CATL commented that the global installation of lithium batteries had arrived at 137GWh in 2020, and the company occupied 34GWh, which allowed them to take first place for 4 consecutive years. CATL believes that the main restriction in the current electric vehicle industry lies on the excessively sluggish growth in the supply chain, and the substantial investment in production capacity not only facilitates the company in solidifying the existing automotive manufacturer clients in China, but also provides the opportunity in continuing the expansion of shipment to Tesla.
(Cover photo source: Guoxuan High-Tech)