As the automotive industry races to manufacture more affordable electric vehicles, which are primarily hindered by expensive batteries, lithium iron phosphate, or LFP, is gaining popularity as the preferred material for EV batteries. The increased use of LFP can be attributed to both environmental and geopolitical concerns, as well as advancements in technology that have narrowed the performance gap compared to more commonly used materials like nickel and cobalt.
Tesla, the leading company in the EV industry, embraced LFP two years ago, sparking renewed interest, particularly in the United States. Several domestic and international manufacturers have committed over $11 billion to establish new production facilities in the country. In other parts of the world, major automakers Toyota and Hyundai recently announced their plans to incorporate LFP batteries into their future vehicles, although their plans for the United States have not been disclosed.
Today, we will explore the new iron-based EV battery, how it differs from other EV battery technologies, and its range capabilities. We will also delve into the reasons behind Tesla’s switch to LFP and the role it will play in the quest for inventing the perfect EV battery.
You likely have various batteries for different consumer electronics in your home. Batteries provide portable power for a wide range of devices, from watches to cars. However, it’s important to note that batteries come in various shapes and sizes. For example, CR2032 batteries revolutionized the world of wristwatches, while AA batteries power your flashlight. AAA batteries are reliable for TV remotes and small toys, while AAAA batteries are less commonly purchased and are used for LED penlights and laser pointers. C batteries are known for their durability, and D batteries are used in portable radios, automatic paper towel dispensers, and medical devices. Additionally, there are 9-volt batteries that power kitchen equipment.
Now, let’s shift our focus to EV batteries. In 2022, iron-based chemistry made up only 3% of the combined battery market in the United States and Canada, compared to 6% in the European Union. The majority of the EV battery market consisted of nickel, cobalt, and magnesium cells. In contrast, the Chinese EV market saw iron-based batteries accounting for 44% of the market, while NCM, or nickel cobalt manganese, batteries made up 56%.
Which raises the question: how does lithium iron phosphate, or LFP, technology fit into the EV landscape? LFP batteries were first introduced in 1996, but it took them nearly ten years to take off. Today, LFP battery technology is used in many different products, such as electric vehicles, solar panels, and motorcycles.
Typically, batteries are named based on the chemicals used in their cathodes. In the case of LFP batteries, the cathode material is made from an inorganic compound called lithium-iron-phosphate. The “F” in LFP represents the chemical symbol for iron, which is “Fe” in the periodic table.
Surprisingly, LFP batteries belong to the lithium-ion battery family. However, while all other lithium-ion batteries are part of the group, not all lithium-ion batteries fall into the same category. For instance, lithium nickel cobalt manganese oxide (NMC) batteries and lithium nickel cobalt aluminum oxide (NCA) batteries are two other members of the lithium-ion battery family that are widely used in electric vehicles.
When comparing iron-based EV batteries to other types, it’s important to consider how batteries convert chemical energy into electricity. Typically, a fully charged lithium-ion battery can become unstable. This is why it is generally recommended to keep the battery at around 80% charge to extend its lifespan.
In the case of iron-based or LFP batteries, the bond between phosphorus and oxygen in the LFP cathode is stronger than the metal-oxygen bond found in other cathode materials. This stronger bond enhances the stability of the battery when it is fully charged. Consequently, LFP batteries can be charged up to 100% without causing significant battery degradation over time. Moreover, LFP batteries are cheaper than NMC and NCA batteries, which rely on nickel and cobalt. The reason for this cost difference is that extracting and purchasing these materials are expensive. However, LFP batteries do not require nickel and cobalt. Instead, they utilize a crystalline compound found primarily in the Earth’s upper mantle, making the extraction process easier and more cost-effective.
Due to these factors, Tesla has announced its plans to expand the utilization of LFP batteries in electric semi-trucks and EVs. However, there’s an important consideration. LFP cells contain a larger amount of lithium compared to NMC cells. Industry experts are concerned that the cost advantage of iron-based batteries could diminish if the price of lithium were to rise. Currently, though, the price of lithium has decreased by over 30% this year. We are witnessing the conclusion of a two-year period during which the value of EV batteries surged 12 times.
With the recent decline in lithium prices, experts anticipate a reduction in the cost of EV batteries. Since batteries are a crucial component of an EV, this price decrease should eventually translate to a lower overall cost. However, it’s worth noting that the current dominance of Chinese suppliers in the iron-based battery technology market poses a challenge. For instance, Tesla currently procures LFP batteries from China’s Contemporary Amperex Technology Company (CATL), which lacks a factory in the United States. Given the ongoing political tensions between the United States and China, convincing Chinese suppliers to establish iron-based battery factories in the US won’t be a straightforward task.
Additionally, iron-based batteries are larger and heavier than nickel-based cells, and they typically have a lower energy capacity. Consequently, they offer a shorter driving range for electric vehicles. Despite these drawbacks, Elon Musk and other advocates of LFP batteries argue that the abundance and lower cost of iron outweigh the limitations that have hindered the global adoption of LFP cells thus far.
Let’s talk about Colin Campbell, Tesla’s Powertrain Division executive. In April of last year, he mentioned that his team was eliminating rare earth magnets from Tesla motors. This decision was driven by concerns regarding the supply chain and the environmental toxicity associated with magnet production. However, it’s important to note that Tesla hasn’t developed a completely new magnet material, as such breakthroughs occur only a few times per century.
Analysts speculate that Tesla has instead opted to use a significantly less powerful magnet, with ferrite being a prominent candidate. Ferrite is a ceramic composed of iron and oxygen mixed with a small amount of metal like strontium. Similar to LFP batteries, ferrite is inexpensive and easy to manufacture. The drawback, though, is that ferrite magnets are only around one-tenth as powerful as neodymium magnets, so this switch will have consequences. Before utilizing motors with permanent magnets, Tesla used induction motors with electromagnets that would become magnetic when electric current was applied. These motors can still be found in models that have front motors.
Now, you might wonder why Tesla decided to eliminate rare earth materials and their powerful magnets in favor of ferrite. This is a question that industry experts have also raised, especially when Tesla announced plans to produce more vehicles with LFP batteries that are heavier and have a lower energy output. However, these choices can prove beneficial for Tesla’s business in the long run. They help the company avoid relying on expensive materials that are subject to political dependencies.
Currently, efforts are underway in the United States and Europe to diversify the rare earth supply chain. A California mine that had been closed since the early 2000s has recently reopened and now contributes approximately 15% of the world’s rare magnets. However, all of the mined materials are shipped to China for processing. Global demand for rare earths is increasing across various industries. Although only 12% of rare earths are currently used in EVs, that percentage is expected to grow. Consequently, analysts predict that other companies will eventually transition to alternative ma terials for their magnets and batteries.
At present, ferrite is far from being the ideal alternative material to replace current magnet materials. However, it is currently the best option available. Developing the perfect magnet material poses numerous challenges. The material must possess magnetic properties, retain magnetism in the presence of other magnetic fields, withstand high temperatures, and be relatively easy to manufacture. While there have been promising developments with magnets containing manganese, for instance, they suffer from stability issues. Additionally, scientists may discover a suitable alternative magnet material, only to find that it cannot be produced in large quantities. Therefore, analysts believe that Tesla will likely continue to incorporate a small amount of rare earths in its future vehicles for components like power steering, automatic windows, and windshield wipers. Achieving a complete switch will still require considerable time and research.
If someone were to create the perfect battery and revolutionize the industry successfully, there are several key attributes it would need to possess. Firstly, it would not necessarily have to charge quickly, as slow EV charging is a major deterrent for consumers. However, it would need to offer high capacity while ensuring safety. Additionally, the ideal battery would be lightweight and compact. While this concept sounds promising in theory, the practical implementation of these features poses challenges.
Increasing charging speed is influenced by various factors. For instance, lithium-ion batteries charge more slowly in cold temperatures compared to warmer conditions. Moreover, batteries are currently designed to optimize longevity, resulting in a consistent charging time regardless of the state of charge. The speed at which a battery can charge also relies heavily on the power output of the charging station. Slower charging occurs when the power output is lower. Therefore, enhancing battery charging speed requires not only advancements in battery materials but also adaptations to address weather conditions, safety considerations, and variations in charging station outputs.
Weight is another critical factor to consider. Although it is theoretically possible to power an airplane with a battery, current batteries lack the energy density required to support anything other than lightweight aircraft. Even if heavy planes could be powered by batteries, their range would be severely limited. By considering current battery densities and weight restrictions for aircraft, aviation analysts have determined that a battery-powered aircraft with 19 seats would have a maximum cruise range of approximately 160 miles. However, it is important to account for additional energy requirements, such as circling the airport for 30 minutes in case of delays and the ability to reach an alternative airport 60 miles away in emergencies. Consequently, the estimated range of 160 miles diminishes to about 30 miles. The future of electric aviation hinges on advancements in battery technology.
Going back to Tesla, you might have heard about the ongoing EV price war. Interestingly, Elon Musk is doing something similar to Henry Ford in 1913 by lowering prices and emphasizing volume above profit margins.
In 1913, Henry Ford started lowering the price of the Model T and installing a conveyor belt beneath the assembly line to boost sales and accelerate the manufacturing of cars. Now, 110 years later, Elon Musk is employing a similar strategy. Musk started reducing the cost of Tesla’s most popular model at the beginning of 2023. This strategy has impacted Tesla’s profit margins. Nonetheless, the company aims to double its production and manufacture 2 million EVs this year. According to Musk, Tesla believes it is laying the foundation to ship a significant number of cars at a lower margin to reap greater profits in the future. With such ambitious goals, it becomes crucial for Tesla to make strategic decisions regarding the batteries powering their EVs.