Under the situation that the subsidies for new energy vehicles have fallen sharply in China, the lower-cost lithium iron phosphate battery has a “recovery” trend. BYD, which was once the representative of this technical line “firm”, once again exposed new iron and lithium battery research production plan. On August 22nd, BYD’s performance exchange meeting revealed that the new generation of iron-lithium batteries, which will be launched in May-June next year, will increase the energy density by 50%, the life span will be 1.2 million kilometers for 8 years, and the cost can be saved by 30 %.
The route between lithium iron phosphate and ternary batteries has a long history. The former one has the advantages of high stability and relatively low price, but there is limited room for improvement in energy density. As the leader in the field of lithium iron phosphate batteries, BYD has been working hard to break through the ceiling of its energy density. In 2018, BYD has stated that the energy density of lithium iron phosphate monomer is 165Wh/kg and the package is 140Wh/kg. In the next two years, the planned unit energy density will increase to 180Wh/kg and the package body will be upgraded to 160Wh/kg.
In actual market applications in China, before 2017, lithium iron phosphate accounted for 70% of installed capacity in new energy vehicles. After the new energy subsidies were tilted toward high energy density and high endurance models, the market share of lithium iron phosphate batteries has gradually declined, the market share in the first half of this year has dropped to 32%. However, the new energy vehicle subsidies have been declining more and more in China. In view of the pressure to reduce costs, car companies will also turn their attention to lower-cost lithium iron phosphate and other materials.
According to data from the China Chemical and Physical Power Industry Association, the market price of lithium iron phosphate battery cells has dropped below 0.7 yuan/Wh (~US$0.1/Wh) in 2019, and the price of ternary battery cells is around 0.9 yuan/Wh (~US$0.12/Wh), the gap between the two begins to expand. With the full withdrawal of subsidies in 2021, the price advantage of lithium iron phosphate will continue to be highlighted.
BYD began to supply batteries to the outside world in 2018, it will split the entire battery business in the future to achieve independent listing. The successful implementation of the new generation of lithium-lithium battery plans will greatly benefit BYD’s competitiveness in power battery and new energy policies, and will help consumers to purchase longer, safer and lower cost new energy vehicles.