There should be a far less expensive battery to support an electric vehicle that is cost effective. In this regard, a number of auto manufacturers are planning to adopt Lithium-iron-phosphate batteries, also referred to as LFP, a battery that China uses largely and whose battery cells are less expensive than those made of nickel and cobalt.
Ford Motor Co. and other EV manufacturers, including Tesla, agree that the use of lithium iron phosphate batteries, which have a lower energy density, might actually reduce the cost of EVs by avoiding the use of nickel and cobalt, which are expensive and in short supply. International EV manufacturers are making plans on how to make these batteries available as they continue to inject more billions to increase the number of electric vehicles on the market. To this end, they are making short-term plans while keeping an eye on the mineral price changes, the technological advancement of batteries and governmental regulations as they put the EV sector to test.
For example, after the rise in cobalt and nickel prices and a disruption in their chain of supply that slowed their production in the previous year, Rivian Automotive Inc. is switching to LFP cells in some of its EVs, including its trucks. CEO RJ Scaringe said that the company has high hopes for LFP, mentioning that the cell performed admirably well when the vehicle required frequent charging.
Initially, LFP in China would mostly be used for inexpensive short-distance vehicles. In Europe, the highly priced cobalt and nickel has been preferred due to their longer range, but this has since changed, said auto executives. The largest supplier of nickel was affected by the Ukraine war, which led to soaring nickel prices; cobalt prices have also doubled in the latest years, and manufacturers have decided to use less of the mineral while responding to environmental and human rights violations in cobalt mining in the Congo where cobalt is largely sourced. Thus, LFP-iron-based cells continue to be important and remain a strong factor in the industry’s evolution.
The iron-based battery cell is also supported by analysts for having a low fire risk and because its properly contained within the car, thus increasing the mileage. Likewise, this chemistry also assists automakers to broaden their battery supplier base in the event of a limited supply.
One researcher expects more than 40% of electric vehicles to be equipped with LFP batteries as we approach 2030. He added that LFP use should not be underestimated because it will eventually spread worldwide and most likely be featured in future models from all types automakers, including Lucid Motors (NASDAQ: LCID).
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