Electric car prices may fall thanks to older LFP battery technology

Some of the patents on Lithium Iron Phosphate (LFP) batteries will expire in 2022. Therefore, producing these older, cheaper and also safer batteries could become more attractive. They are currently still produced in China, but may soon also be produced in Europe and the US.

China had an agreement with the patent holders (a group of universities from the US and Canada) who have the batteries produced for the Chinese market. Manufacturers outside of China have focused on lithium-ion batteries. These have greater energy density, which translates to greater range for electric vehicles.

LFP is used in 17% of electric vehicles worldwide and this could increase further. Vehicle manufacturers are being driven into this corner by rising raw material prices and patents. This makes iron-based batteries look increasingly attractive: they cost less, consume less scarce materials and are also less likely to catch fire.

Although lithium shortage forecasts have been revised negatively, this does not appear to be a barrier for LFP batteries. Even if a shortage of lithium will slow down production, this battery principle will still “win” over Nickel-Manganese-Cobalt (NMC) batteries. Those metals are becoming scarce even faster if possible.

It is predicted that a quarter of electric vehicles built in Europe will use LFP. This will mainly concern cheaper vehicles, because the expected range of an LFP-EV is smaller.


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