EV Companies Not Using Iron LFP Batteries Are Doomed

Volkswagen, Ford and GM are making nickel batteries. Nickel batteries are currently about twice as expensive as iron LFP batteries. LFP battery volume will be about 80% of the total battery market in 2024-2025. Nickel prices are increasing and LFP battery mass production will drive down their prices faster. Iron LFP batteries could become three times less expensive than nickel batteries.

EV Companies without Iron LFP batteries will only have the supplies to compete for 20% of the EV market in 2015. If Tesla retains 60% of the nickel battery EV market, then legacy auto combined will have a maximum of 10% of the EV market in 2025. It will take a minimum of 2-3 years and probably longer to launch new iron LFP EV models and to build and adapt factories. EV Companies with 1-2% market share will have massive economies of scale disadvantages. They will also be using more expensive batteries with further cost disadvantages.

Ford’s EV plans are for 240 GWh of annual global EV battery capacity by 2030 which would be enough for 2 million F150 Lightning. Ford and SK On have to actually execute to reach that level of battery production and Ford will have to make the factories to build the EVs and Ford will have to be able to successfully sell those EVs. Ford will get about 80% (up to 170-185 GWh) from SK On.

SK On’s second plant in Georgia, US: 11 GWh

Ford and SK Innovation’s SK On joint venture (BlueOvalSK): 129 GWh
1) Stanton, west Tennessee – Blue Oval City (43 GWh) – 2025
2) and 3) Glendale, central Kentucky – BlueOvalSK Battery Park (2x 43 GWh) – 2025
New JV in Turkey: 30-45 GWh
Total: 170-185 GWh or 70-77% out of 240 GWh total

Ford will be struggling to reach the 120 GWh/year battery level in 2026 to have the batteries for 1 million EVs per year.

GM is developing their own Ultium battery line. Ultium batteries are using nickel chemistry. The main selling point of the Ultium batteries is that they use 70% less cobalt than other nickel batteries. Nickel prices have gone up a lot with the war in Ukraine. It is not just the cobalt making nickel chemistry batteries more expensive.

GM’s third battery plant for its Ultium Cells LLC joint venture with LG Energy Solution will be located in Lansing, Michigan. Site preparations for the $2.4 billion plant are scheduled to begin this summer, while cell production is scheduled to begin in 2024.

GM expects these projects to give it North American manufacturing capacity for 1 million EVs annually, including 600,000 electric trucks once both the Orion facility and the Detroit-area “Factory Zero” are fully ramped up.

Tesla produced 936000 EVs in 2021 and had manufacturing capacity over 1.3 million cars at the end of 2021. Tesla’s production in December 2021, was an annualized runrate of 1.3 million cars. VW, GM and Ford have to have fantastic execution in order to be only four years behind Tesla.

Toyota is partnering with BYD to make an iron LFP blade battery version of the Toyota Corolla. Partnering with Chinese carmakers who have a lot of iron LFP battery supply and experience is a reasonable path to making a competitive EV. There is no guarantee that such joint venture cars will be profitable or successful. Profits would be halved for Toyota.

SOURCES- Ford, GM, InsideEV, VW, Car and Driver
Written by Brian Wang, Nextbigfuture.com