Lithium Iron Phosphate Batteries Market by Industry (Automotive, Power, Industrial, Consumer Electronics, Aerospace, Marine, Others), Application (Portable, Stationary), Voltage (Low, Medium, High), Capacity, Design, and Region - Global Forecast to 2028
[290 Pages Report] The global Lithium Iron Phosphate Batteries Market is estimated to grow from USD 17.7 billion in 2023 to USD 35.5 billion by 2028; it is expected to record a CAGR of 14.9% during the forecast period. Recently regions has witnessed a rapid growth in lithium iron phosphate batteries demand in recent years due to the increased adoption by EV manufacturers and rising industrial automation. The market for lithium iron phosphate batteries is projected to benefit greatly from rising investment by key global players.
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Lithium Iron Phosphate Batteries Market Dynamics
Driver: Increasing adoption of lithium iron phosphate batteries by EV manufacturers
The confluence of favorable policies propagated by local governments and rapid development of surrounding infrastructure for EV charging are expected to positively influence the adoption of EVs and further drive demand for LFP batteries. Both lithium iron phosphate (LFP) and lithium-ion batteries are firmly occupying the current EV battery market. While LFP batteries being incorporated into batteries has been commonplace for years, their usage, specifically within the EV sector, has been rather limited to date. However, the expected demand for EVs to utilize LFP batteries in 2022 is expected to soar to unprecedented levels. Specifically, LFP batteries captured approximately 14% of the global EV market in 2021, a net growth of approximately 5.2% compared to 2020. Growth can be attributed to various characteristics and properties of LFP batteries, including but not limited to, relatively better discharge rates, charging efficiency, and lower energy density compared to conventional Li ion batteries.
Globally, in the coming decade EV manufacturers are expected to commit very large investments in battery sourcing and manufacturing of EVs. In fact, this strategy employed by marketers in the EV space can likely be traced back to their organizational standing: concern for the environment and regulations initiated long before their intentions resulted in large reductions in battery costs, charges rat es and EV range. For example, Daimler, a leading participant in the global EV market, wishes to form an investment of approximately 30 billion USD for LFP batteries. Likewise, Hyundai and its cousin Kia are projected to invest an inferior amount of 20 billion USD toward electric and self-driving EVs across the five-year period. Government policies and the rapid development of EV charging stations are also expected to facilitate further adoptions of EVs, and ultimately subsequently create demand for LFP batteries.
Restraint: Risks associated with Safety issues and disposal of spent lithium-based batteries
Batteries based on lithium are classified as hazardous waste under federal and state laws because of their ignitability, reactivity, and toxicity if they are improperly disposed of. Discharged batteries can still be dangerous if they contain significant charge. Lithium batteries contain hazardous chemicals, including acids and heavy metals such as mercury and lead. Several incidents have occurred, such as a fire caused by lithium-based batteries in 2007, which closed major motorways in the UK. As a best practice, spent batteries should be stored in watertight containers to avoid accidental contact with flammable materials, as well as being situated near appropriate fire extinguishing equipment. Unplanned discharges from residual charges present hazards to ecosystems. Appropriate labeling and storage of spent batteries are essential, especially for smaller batteries that can be ingested. Larger lithium iron phosphate batteries may be mistaken for lead-acid batteries, which require additional oversight for safe storage. Many proposed regulatory obligations regarding spent batteries associated with transportation and storage are due to these risks.
Opportunities: Transition from conventional power generation to renewable generation
Due to trends, such as the rising decarbonization, and sharp reductions in renewable energy generation, the world is fast transitioning from conventional power generation to renewables. Renewable energy generation is intermittent and drives the need for storage technologies for energy. Battery energy storage systems store excess electricity generated by renewable sources during off-loads. Battery energy storage systems is sustainable and also reduces emissions. The growth of renewables further spurs the adoption of battery storage solutions. Lithium iron phosphate batteries are suited to energy storage applications due to their safety features and high thermal properties. Also lithium iron phosphate batteries are not likely to catch fire and does not release harmful gasses when overheated. Battery storage systems use a high current to charge quickly, making them ideal for energy storage applications. Further, as they decline in cost coupled with advances of energy storage, the demand for lithium iron phosphate batteries in utility energy storage projects is rising.
Challenges: Technological drawbacks of LFP batteries
Lithium iron phosphate batteries display reduced energy density compared with alternative lithium-ion batteries, which is highly relevant as society continues to embrace small, lightweight batteries for applications such as electric vehicles (EVs). To achieve energy densities of 300 Wh/kg and 800 Wh/L, the electrode powder particle size must be reduced to increase packing density. The increased packing density will yield an increase in the contact surface area, resulting in improved charge rate and energy density of the cell. However, it also leads to more unwanted reactions, hastened degradation of the battery material, and a reduced lifespan of the battery. To mitigate degradation caused by unwanted reactions, one solution is to coat the powder particles with an ultrathin buffer layer that has high conductivity and is chemically inert. However, ensuring the buffer layer can achieve both properties adds complexity.
Lithium iron phosphate batteries Market Ecosystem
Prominent companies operating in lithium iron phosphate batteries market include well established, financially stable manufacturers of lithium iron phosphate batteries systems and components. These companies have been operating in the market for several years and possess a diversified product portfolio, state-of-the-art technologies, and strong global presence, sales and marketing networks. Top companies operating in lithium iron phosphate batteries market include BYD Company Ltd. (China), Contemporary Amperex Technology Co., Limited. (China), Gotion, Inc. (US), CALB (China), and A123 Systems LLC (US).
The medium segment, by voltage, is expected to be the second largest market during the forecast period.
This report segments the lithium iron phosphate batteries market based on voltage into different types: low (Below 12V), medium (12–36V), and high (Above 36V). The medium (12–36V) segment is expected to be the second largest market during the forecast period. The high-power voltage makes these batteries ideal for usage in industries such as electrical vehicles, oil & gas, medical, telecom, and solar energy storage. The growing EV market and the rising adoption of energy storage systems have increased the need for batteries with high power voltage that can keep the devices running for long hours and, at the same time, provide enhanced safety due to low thermal runway, which may result in a fire in the case of excessive overheating. These batteries are often grouped to form modules, and these modules are used in applications requiring heavy loads such as EVs, industrial applications, robots, medical applications, hybrid trucks, trains, and power backup.
By industry, the power segment is expected to be the third largest during the forecast period
This report segments the lithium iron phosphate batteries market based on industry into seven segments: automotive, power, industrial, consumer electronics, aerospace, marine, and others. The power industry is working on generating renewable energy and storing it for multiple uses. This stored energy is produced, controlled, and distributed using smart grid technology. Attributes such as low cost, less space required for installation, high life cycle, safety, and less prone to the thermal runway are a few of the driving factors for the adoption of lithium iron phosphate batteries in smart grids and renewable energy storage systems. Lithium iron phosphate batteries are more resistive toward extreme temperatures, which means the battery capacity is slightly reduced, whereas, in the case of lead-acid batteries, it is reduced by 50%..
“North America”: The third largesty in the lithium iron phosphate batteries market”
North America is expected to third largest region in the lithium iron phosphate batteries market between 2023–2028, followed by the South America, and Middle East & Africa. This can be majorly attributed to the support provided by the North American Free Trade Agreement (NAFTA). The region is also among the largest markets for EVs. Various automotive companies such as Tesla Motors Inc. (US), General Motors Corp. (US), and Mitsubishi Motors Corp. (Japan) are actively working in the field of EVs in the US and Canada, leading to the rapid adoption of lithium iron phosphate batteries. The US is enriched with ample lithium deposits that can be very well exploited in the future to produce lithium iron phosphate batteries. This, in turn, is driving the demand for lithium iron phosphate batteries in the region..
Key Market Players
The lithium iron phosphate batteries market is dominated by a few major players that have a wide regional presence. The major players in the lithium iron phosphate batteries market include BYD Company Ltd. (China), Contemporary Amperex Technology Co., Limited. (China), Gotion, Inc. (US), CALB (China), and A123 Systems LLC (US). Between 2018 and 2022, Strategies such as contracts, agreements, partnership, product launches, and expansions are followed by these companies to capture a larger share of the lithium iron phosphate batteries market.
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Scope of the Report
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Report Metric |
Details |
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Market size available for years |
2017–2028 |
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Base year considered |
2022 |
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Forecast period |
2023–2028 |
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Forecast units |
Value (USD Million/USD Billion), Volume (Units) |
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Segments covered |
Lithium iron phosphate batteries market by design, industry, capacity, voltage, application and region. |
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Geographies covered |
Asia Pacific, North America, Europe, South America, and Middle East & Africa. |
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Companies covered |
BYD Company Ltd. (China), Contemporary Amperex Technology Co., Limited. (China), Gotion, Inc. (US), CALB (China), A123 Systems LLC (US), Ultralife Corporation (US), K2 Energy (US), Benergy Tech Co. Ltd (Hong Kong), BSL NEW ENERGY TECHNOLOGY CO., LTD (China), Electric Vehicle Power System Technology Co., Ltd (China), Bharat Power Solutions (India), Victron Energy (Netherlands), taicopower (China), EverExceed Industrial Co., Ltd (China), Epec, LLC. (US), Shenzhen Eastar Battery Co., Ltd (China), Shenzhen Cyclen Technology Co., Ltd (China), KAYO Battery (Shenzhen) Company Limited (China), and OptimumNano Energy Co., Ltd. (China), LITHIUMWERKS (Netherlands), RELiON Batteries (US), Karacus Energy Pvt. Ltd. (India), Lohum Cleantech Private Limited (India) and RCRS Innovations Private Limited (India). |
This research report categorizes the lithium iron phosphate batteries market by design, industry, capacity, voltage, application and region.
On the basis of by Design:
- Cells
- Battery Packs
On the basis of by Capacity:
- 0–16,250 mAh
- 16,251–50,000 mAh
- 50,001–100,000 mAh
- 100,001–540,000 mAh
On the basis of by Industry:
- Automotive
- Power
- Industrial
- Consumer Electronics
- Aerospace
- Marine
- Others
On the basis of by Application:
- Portable
- Stationary
On the basis of by Voltage:
- Low (below 12V)
- Medium (12V–36V)
- High (above 36V)
On the basis of Region:
- North America
- South America
- Europe
- Asia Pacific
- Middle East & Africa
Recent Developments
- In March 2023, CATL and BAIC Group entered into the coordination agreement on the promotion and application of the latest technologies in commerce. In such a deal the company CATL will assume full responsibility for the development and manufacturing of BAIC Group electric vehicles while offering competitive EV battery products and services.
- In March 2023 Gotion, Inc. and Edison Power Co. , Ltd. made a cooperative cooperation to expand the scale of large storage batteries and recycling industries in Japan for the development of renewable energy and the introduction of Gotion batteries in Japan. Gotion will also collaborate with Edison Power to work on the creation of a wholesale circular storage battery recycling system of LFP batteries in Japan.
- In November 2022, BYD Company Ltd unveiled that it is to build a new power battery production base in Wenzhou, Zhejiang province, China with an annual output of around 20GWh. The first production line is expected to go fully operational in the 2024 fiscal year.
- In August 2022, CALB said it had aimed ‘to make a 350wh/kg battery with Lithium ferromanganese phosphate that supports 4C fast charging with long cruising range as well as a semi-solid battery of 400wh/kgs’.
Frequently Asked Questions (FAQ):
How big is the lithium iron phosphate batteries market?
The global lithium iron phosphate batteries market was valued at USD 17.7 billion in 2023 and is projected to reach USD 35.5 billion in 2028, exhibiting a CAGR of 14.9% during the forecast period.
What are the major drivers for the lithium iron phosphate batteries market?
Growing demand for battery-operated material-handling equipment in various industries and rising industrial automation will be major drivers for the lithium iron phosphate batteries market.
Which is the largest region during the forecasted period in the lithium iron phosphate batteries market?
Asia Pacific is expected to dominate the lithium iron phosphate batteries market between 2023–2028, followed by Europe and North America.
Which is the largest segment, by industry during the forecasted period in the lithium iron phosphate batteries market?
The Automation segment is expected to be the largest market during the forecast period. AHTS vessels are specialized ships designed for various offshore operations in the oil and gas industry, for example, anchor handling, towing and positioning, supply operations, dynamic positioning, firefighting and safety, construction support, and crew accommodation.
Which is the fastest segment, by end-user during the forecasted period in the lithium iron phosphate batteries market?
The offshore wind segment is expected to be the fastest market during the forecast period. The increasing deployment of offshore wind farms would drive the demand for lithium iron phosphate batteriess used during the installation, maintenance, and dismantling of offshore wind farms.
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The study involved major activities in estimating the current size of the lithium iron phosphate batteries market. Exhaustive secondary research was done to collect information on the peer and parent markets. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. Thereafter, market breakdown and data triangulation were used to estimate the market size of the segments and subsegments.
Secondary Research
This research study on the lithium iron phosphate batteries market involved the use of extensive secondary sources, directories, and databases, such as Hoovers, Bloomberg, Businessweek, Factiva, IRENA, International Energy Agency, and BP Statistical Review of World Energy, to identify and collect information useful for a technical, market-oriented, and commercial study of the lithium iron phosphate batteries market. The other secondary sources included annual reports, press releases & investor presentations of companies, white papers, certified publications, articles by recognized authors, manufacturer associations, trade directories, and databases.
Primary Research
The lithium iron phosphate batteries market comprises several stakeholders such as lithium iron phosphate batteries manufacturers, manufacturing technology providers, and technical support providers in the supply chain. The demand side of this market is characterized by the rising demand for lithium iron phosphate batteries in, automobile, power, industrial, consumer electronics, marine, and aerospace industry. The supply side is characterized by rising demand for contracts from the industrial sector, and mergers & acquisitions among big players. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information. Following is the breakdown of primary respondents:
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Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and validate the total size of the lithium iron phosphate batteries market. These methods were also used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size includes the following:
- The key players in the industry and market have been identified through extensive secondary research, and their market share in the respective regions have been determined through both primary and secondary research.
- The industry’s value chain and market size, in terms of value, have been determined through primary and secondary research processes.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
Lithium iron phosphate batteries Market Size: Tow-Down Approach
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Data Triangulation
After arriving at the overall market size from the estimation process explained above, the total market has been split into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics for all the segments and subsegments, the data triangulation and market breakdown processes have been employed, wherever applicable. The data has been triangulated by studying various factors and trends from both the demand- and supply sides. Along with this, the market has been validated using both the top-down and bottom-up approaches.
Market Defenition
Lithium iron phosphate (LiFePO4) batteries are a specific type of rechargeable battery with cathodes composed of lithium iron phosphate. They are a notable segment within the battery market, valued for their high power density, long cycle life, and enhanced safety features. LiFePO4 batteries find extensive applications in various industries, including electric vehicles, renewable energy storage systems, portable electronics, and industrial equipment. The market for lithium iron phosphate batteries is driven by the growing demand for reliable and efficient energy storage solutions, advancements in battery technology, increasing adoption of electric vehicles, and the shift towards renewable energy sources. The market is expected to continue expanding as these batteries offer a compelling alternative to other lithium-ion chemistries.
The growth of the lithium iron phosphate batteries market during the forecast period can be attributed to the growing demand for battery-operated material-handling equipment in various industries and growing rising industrial automation across major countries in North America, South America, Europe, Asia Pacific, and Middle East & Africa.
Key Stakeholders
- Lithium iron phosphate battery manufacturers & providers
- Electric vehicle (EV) manufacturing companies
- Lithium-ion battery manufacturers & providers
- R&D laboratories
- Energy & power sector consulting companies
- Distributors of lithium iron phosphate batteries
- Government and research organizations
- State and national regulatory authorities
Objectives of the Study
- To describe, segment, and forecast the lithium iron phosphate batteries market based on capacity, industry, application, voltage, and region, in terms of value.
- To describe and forecast the market for five key regions: North America, Europe, Asia Pacific, South America, Middle East & Africa, along with their country-level market sizes, in terms of value.
- To provide information on design of lithium iron phosphate batteries
- To provide detailed information regarding key drivers, restraints, opportunities, and challenges influencing the growth of the market.
- To provide the supply chain analysis, trends/disruptions impacting the customer’s business, market map, pricing analysis, and regulatory analysis of the market.
- To analyze opportunities for stakeholders in the market and draw a competitive landscape of the market.
- To strategically analyze the ecosystem, tariffs and regulations, patent landscape, trade landscape, Porter’s five forces, and case studies pertaining to the market under study.
- To benchmark market players using the company evaluation quadrant, which analyzes market players on broad categories of business and product strategies adopted by them.
- To compare key market players with respect to the product specifications and applications.
- To strategically profile key players and comprehensively analyze their market rankings and core competencies.
- To analyze competitive developments, such as contracts & agreements, investments & expansions, mergers & acquisitions, new product launches, partnerships, joint ventures & collaborations, in the lithium iron phosphate batteries market
Available Customizations:
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:
Product Analysis
- Product Matrix, which provides a detailed comparison of the product portfolio of each company
Company Information
- Detailed analyses and profiling of additional market players
Generating Response ...
Growth opportunities and latent adjacency in Lithium Iron Phosphate Batteries Market
For Lithium Iron Phosphate Batteries Market, Marketsandmarkets have profiled top 20 players in terms of their business overview, financial analysis of last 3 years, product offered, new product launched, recent developments including Mergers & Acquisitions and SWOT analysis. Chapter 10 covers the market share analysis for these players and the recent developments took place since 2018 till 2021 for instance in product launches, deals and Partnerships % Collaborations of these companies. Contents of Interim: 1) Market Overview 2) Competitive Landscape (WIP) 3) Company Profiles (WIP) 4) Appendix. For each key player, Marketsandmarkets will provide their manufacturing process, by location (world-wide) and inform which type of production methodology they adopted (i.e., ) Phosphoric acid(wet process & elemental phosphorus process), or Ammonium Dihydrogenphosphate, or Iron Phosphate or Precursor or LFP battery.