'Battery Fire Accidents on the Rise'... Why LFP Batteries Are Gaining Attention

Low Fire Risk of LFP Batteries Draws Attention
Price Competitiveness in Buses, Trucks, and Mid-Low Range Models
Key LFP Patents to Expire in US Market Next Year

[Asia Economy Reporter Yoonju Hwang] The reason why LG Energy Solution and SK Innovation, which have focused on nickel-cobalt-manganese (NCM) batteries, are now developing lithium iron phosphate (LFP) batteries is due to the high market potential in terms of price and safety. In particular, as key patents expire around April next year, the domestic battery industry is also gearing up for full-scale development.

LFP batteries are produced using iron instead of cobalt. By using iron instead of expensive raw materials like cobalt, the price is relatively low, and due to the technical limitations of NCM development, China has focused on this product. Recently, with the sharp rise in raw material prices, not only the domestic battery industry but also the automobile manufacturers are turning their attention to LFP products.

According to the Korea Resource Information Service, the price of cobalt was $52,960 per ton on October 5, a 60.4% increase compared to the beginning of the year ($33,000 per ton). During the same period, manganese also surged 78.9%, from $1,305 per ton to $2,335 per ton. On the other hand, the price of iron ore, which had been soaring, fell 28.2% from $161.8 per ton to $116.1 per ton. As demand for electric vehicle batteries rapidly increased, the prices of key raw materials for NCM batteries also rose sharply. To popularize electric vehicles, battery prices must be lowered further. Unless it is a premium model, it is difficult to afford NCM batteries, which have high output and high prices.

Another reason for focusing on LFP batteries is safety. They have a lower risk of fire compared to NCM batteries. A researcher from Battery Company A explained, "Recently, battery fires have become an issue, making safety an important topic. Despite the reduced output at low temperatures, electric vehicle manufacturers are paying attention to LFP batteries because of their lower fire risk, so the battery industry cannot avoid developing them." Volkswagen and Ford have announced plans to use LFP batteries, and Tesla has mentioned that about two-thirds of its electric vehicle sales will be equipped with LFP batteries.

Meanwhile, the expiration of key patents related to LFP in April next year has also triggered development competition in the domestic battery industry. LG Chem considered establishing a joint venture for LFP batteries in 2011 but reportedly gave up due to the complex patent issues involved in each stage of battery manufacturing. China has developed and produced LFP batteries by paying royalties under the condition that they are sold only in the domestic market. In Europe, key patents expired starting last year, enabling the export of electric vehicles equipped with LFP batteries. In particular, the most important patent, 'LixM1-yM(XO4)n,' will expire on April 27 next year.

An industry insider said, "Although NCM batteries with a high nickel content will still dominate the market, as electric vehicle penetration increases, demand for LFP batteries will also grow, especially for entry-level models, buses, and trucks. Unlike Samsung SDI, which produces prismatic and cylindrical batteries, LG and SK have no choice but to produce LFP batteries as well."

This content was produced with the assistance of AI translation services.