LFP battery switch drives supply chain changes

A shift back towards using lithium iron phosphate (LFP) chemistry in electric vehicle (EV) and energy storage batteries is prompting changes in production along the supply chain.

LFP was the initial cathode chemistry used in lithium-ion batteries for EVs in China. But consumer reluctance to buy vehicles requiring frequent recharging prompted manufacturers to switch to using higher-density lithium nickel-cobalt-manganese (NCM) chemistries that can travel further on a single charge.

The Chinese government has incentivised the production of EVs with longer driving ranges with its subsidies in recent years, accelerating the shift. This in turn prompted mining projects to shift from producing lithium carbonate, which is favoured for LFP cathode materials, to lithium hydroxide, which is used in NCM cathodes to help stabilise the nickel content.

But a push to reduce the amount of cobalt used in batteries and concerns over the safety of high nickel content has resulted in battery manufacturers, car makers, energy storage suppliers and mining companies taking another look at LFP. Concerns over spikes in the cost of cobalt and global reliance on supply from the Democratic Republic of the Congo (DRC) have driven battery makers to reduce the cobalt content in cathodes and instead use more nickel, but higher nickel content reduces thermal stability and raises the risk of explosion. LFP, while offering lower energy density, is more stable.

Lithium Australia is advancing the commercialisation of its patented LieNA extraction process to produce lithium phosphate directly from waste spodumene for use in LFP cathodes, reducing production costs and the number of conversion steps. Mining firms have been considering ways to shorten the process, as producing lithium chemicals typically requires the processing of brines to make lithium carbonate and then refining lithium carbonate into lithium hydroxide.

Spodumene producers have the advantage of being able to produce hydroxide without the intermediate step, and US-based Piedmont Lithium on 23 July said it has produced initial quantities of battery-quality hydroxide from spodumene concentrate using its ore-to-hydroxide conversion process.

But the production of lithium phosphate offers a "smaller mining footprint, greater sustainability, superior safety and an absence of conflict metals", Lithium Australia's managing director, Adrian Griffin, said recently. "There are good reasons why the Tesla Model 3 is going for LFP batteries in China […] and LieNA is aimed at servicing the fast-growing LFP battery market," he said.

US EV maker Tesla has opted to use LFP batteries from China's CATL in its cars produced in China. The vehicles' efficiency is sufficient for it to run on an LFP battery pack that will start volume production later this year, chief executive Elon Musk said in late July. This will free up NMC batteries for the company's planned electric semi-truck set for production next year, which Musk said requires the higher-energy density and longer driver range to transport cargoes.

Chinese EV manufacturer BYD and German carmaker Volkswagen are also using LFP batteries in vehicles to be sold in China. Volkswagen in May acquired a stake in Chinese battery supplier Gotion-High Tech, one of the country's largest suppliers of LFP batteries. Gotion has just begun construction of its eighth battery production plant, with a planned capacity of 10GWh, to be completed in late 2021.

China's Ministry of Industry and Information Technology (MIIT) lists 12 EV models that use LFP batteries, accounting for 24pc of 49 vehicles. In May, it issued new safety standards addressing thermal runway in batteries that has caused EV explosions. The regulations come into effect on 1 January 2021, a further encouragement to manufacturers to use LFP battery chemistry.

The increased adoption of the technology in China, the world's largest EV market, could spread to other regions. "LFP is experiencing renewed market enthusiasm because global leaders BYD, CATL and Tesla have announced high-energy-density LFP battery packs in vehicles that facilitate driving ranges of up to 600km," Dan Blondal, chief executive officer of Canadian battery materials producer Nano One, said recently. "These innovations could radically expand the global demand for LFP cathode materials beyond Asia and into North America, Europe and other markets."

The switch to LFP is also evident in the use of batteries for energy storage, which do not have the energy density demands of EVs. Canada-based Eguana this week launched an LFP-based residential battery storage system for North America that it will offer along with its NCM-based system. The company developed the LFP alternative in response to demand for a cobalt-free product, it said.

Lithium Australia's Soluna energy storage division uses LFP and NCM cathodes in its systems, of which it has made its first sales and installations, it said today. Germany-based Sonnen, which is owned by Shell, uses only LFP in its battery storage system, which it launched in its 12th country, Belgium, last month.

By Nicole Willing