A significant shift is underway in the electric car segment. No, I’m not talking about the shift on EVs. It is still progressing despite a few manufacturers get cold feet. What I’m referring to here is a subtle change in the composition of EV batteries that has some significant implications.
A type of lithium-ion battery called lithium iron phosphate, or LFP, is becoming increasingly common in EVs around the world. Manufacturers such as Ford, Mercedes-Benz, Rivian, Tesla and others now offer these suits as an alternative to, or an outright replacement for, the nickel-manganese-cobalt (NMC) and nickel-cobalt-aluminum (NCA) chemistries which dominated for years. While LFP cells accounted for just 6 percent of the market in 2020, they have now jumped to around 30 percent.
What do all these obscure elements – and dizzying array of acronyms – really mean, and what are the implications for the vehicles that will hit the road over the next few years? Let’s dig into the details.
First, a quick primer on how lithium-ion batteries work (for a deeper dive, check out this in-depth explanation).
Batteries have three main components: anode, cathode and electrolyte. When a draw is created in an electrical circuit—for example, when you press your EV’s “on” button—a chemical reaction occurs inside the battery. Negative ions move between anode and cathode, across the electrolyte, to generate current. It is the cathode that determines the battery’s behavior, including its temperature resilience, energy density and overall lifespan.
When we talk about lithium-ion chemistries, we’re actually talking about the materials that make up the cathode, which in an LFP battery is literally lithium iron phosphate (LiFePO4). More important, however, is what is missing from an LFP cathode.
LFP batteries have some important advantages, but for anyone concerned about the environmental and ethical impact of EV ownership, the primary advantage is that LFP batteries do not contain materials such as nickel, manganese or cobalt.
These minerals are problematic in several ways. Exploiting it takes a heavy environmental toll, damaging local ecologies in areas that lack regulations, such as the Democratic Republic of the Congo and Myanmar. This devastated local communities and led to the exploitation of their workers.
LFP batteries also cost significantly less. According to BloombergNEF’s analysisLFP cells are on average 32 percent cheaper than NMC cells. Sunoj George, director of battery engineering and drive architecture at Rivian, said his company has seen savings of 20 percent to 30 percent with LFP. In September, LFP batteries fell under $60 per kilowatt hour, helping push global battery cell prices to record lows.
LFP batteries are also more resilient, resulting in a longer lifespan. This means that vehicles with an LFP battery can handle more charge-discharge cycles before the battery begins to lose capacity, making EVs well-suited for fleets and other applications that require frequent recharging.
This resilience also helps these batteries handle extreme temperatures. “LFP offers more thermal stability than tripartite [three-part] battery systems like NCM or NCA,” said Rivian’s George. Battery fires are therefore less of a concern for LFP powered cars.
If LFP batteries have all those benefits, why aren’t they in every EV? Unfortunately, they have some significant drawbacks.
The biggest is energy density. An LFP battery will offer fewer kilowatt-hours of capacity for a given weight and volume. This means fewer kilometers of total range on a charge. This is offset somewhat by the faster charging mentioned above, so for frequent, short trips it’s less of an issue. But since so many consumers still look to maximum range before any other factor, this is a potential strike against LFP-powered cars.
Another problem is poor cold-weather performance. LFP-powered EVs lose more of their maximum range when the battery is cold and may even struggle to recharge in low temperatures.
But there are ways to address it. Rivian’s George says that the company’s “thermal conditioning system” means that “the customer should see no discernible difference” between LFP’s cold weather performance and that of NCM or NCA batteries.
Finally, while LFP batteries cost less to manufacture, they are also worth less when recycled. “There is less inherent metal value in an LFP suit versus a nickel-based suit,” said Jackson Switzer, vice president of commercial at Redwood Materials. Less value may mean less motivation to recycle these batteries, but the good news is that they are just as easily recyclable.
So it’s a give-and-take, but manufacturers are increasingly deciding that the trade-offs are worth it, especially in their naval applications.
Mercedes-Benz has chosen LFP cells for its new eSprinter van. “Cell degradation is lower than other batteries, which at the same time also ensures durability and low maintenance requirements. It’s ideal for light commercial vehicles,” said Klaus Rehkugler, head of sales and marketing at Mercedes-Benz Vans.
Lisa Drake, vice president of EV programs and energy supply chain at Ford, said that as EV charging stations become more widespread, LFP cells will make more sense: “People are more willing to accept shorter trips, smaller trips, but they want [charge] more often. And they want fast charging more often. And LFP battery technology enables them to do that.”
The same applies to vehicles for personal use. Last year, Mercedes-Benz unveiled its Concept CLA-Class, a small, next-generation electric sedan that will debut next year. Markus Schäfer, chief technology officer at Mercedes-Benz, said the company will offer different battery technologies. “We have to divide, so it is an entry version with an LFP battery with a smaller range. In terms of kilometers, it can be 500 kilometers [311 miles] on this CLA Class car,” he said. “But at the top you can opt for more horsepower, for more range.” So the performance oriented version will rely on non-LFP design.
In the future, LFP is expected to continue to gain momentum. An April report from BloombergNEF indicates a continued increase in LFP production in China by major suppliers such as CATL, along with expanding output from manufacturers elsewhere in the world such as LG Energy Solution in South Korea.
Given LFP batteries’ durability and cost advantages, Ford’s Drake believes that lining up an LFP inventory will be essential for manufacturers: “If you don’t have LFP in your fleet, I don’t know how you’re going to really scale not.”
