Why LFP batteries are poised to bring down entry-level EV prices

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An older, cheaper and safer battery technology already dominating China's electric vehicle industry is now poised to rewrite battery manufacturing worldwide and boost EV sales in the United States.

The face of battery production in the U.S. and Europe could change in the next few years because of a number of patents forLFP chemistries.

China has owned the market for nearly a decade because of an agreement with patent holders in the U.S. and Canada. Because of their higher energy density, other lithium-ion chemistries have been developed to power EV's.

According to the AlixPartners2022 Global automotive outlook, LFP is a potential path for the mass market.

Universal access to patents and the rising prices of raw battery materials are driving many manufacturers to use iron-based batteries. They cost less and are less likely to catch fire.

According to a report Tuesday from the Advanced Propulsion Centre, a partnership between the U.K. government and automakers, the global EV sales forecast could be cut in half by the end of the century.

That doesn't seem to have stopped the LFPs from moving forward. Even if there is a shortage of nickel-manganese-cobalt, the battery chemistry is still easier to make than the NMC.

A quarter of EV built in Europe will use LFP, according to the same organization. Iron-based batteries will power entry-level and cheaper vehicles, while nickel-based cells will be used for higher-end and performance cars, according to industry analysts.

There are 250 battery-electric nameplates coming to the U.S. through 2030 and LFP batteries could play a large role in them. Light and medium commercial vehicles are in high demand due to their ability to deliver goods in urban areas.

There will be a number of chemistries competing to become the chemistry of choice.