Lithium iron phosphate batteries are popular in the energy storage industry, leaving cobalt and nickel behind

2025/05/29

TechNews Technology News
May 27, 2025
Author Lan Yifeng

Although lithium batteries are named after lithium, many batteries still use a relatively large amount of cobalt, so some people jokingly say that this type of lithium battery should be renamed cobalt battery. However, recently, the Democratic Republic of Congo, a major cobalt producer, has issued an export ban because the price of cobalt is too low and the Democratic Republic of Congo is unwilling to sell assets at a low price; nickel, another commonly used metal material for lithium batteries, has been in oversupply for two consecutive years from 2023 to 2024, and will continue to be in oversupply this year. Lithium batteries are not popular, so how can cobalt and nickel be in excess?

This is because the main application of lithium batteries has shifted from electric vehicles to energy storage. Lithium batteries used in electronic products and electric vehicles emphasize less weight but longer battery life, that is, the focus is on energy density. The more mainstream is ternary lithium batteries. As the name suggests, the positive electrode material contains nickel, cobalt, manganese, or nickel, cobalt, and aluminum in addition to lithium. The three elements are such as nickel cobalt manganese oxide, so the amount of nickel and cobalt is large.

However, when storing energy, large facilities are set up with a large number of batteries to store electricity, and they do not need to be moved. The volume and weight are not a problem, but safety considerations are more important. Therefore, there are a large number of lithium batteries in the space. Once a fire occurs, the consequences are disastrous. Therefore, more and more lithium iron phosphate batteries are used in energy storage applications. As the name suggests, the positive electrode is lithium iron phosphate, and cobalt and nickel are not required. If most of the market demand is transferred to lithium iron phosphate batteries, cobalt and nickel will be left behind and cry secretly.

When ternary batteries dominated the market, the price of cobalt and nickel rose, causing the price of batteries to remain high. After calculating the cost, many energy storage projects found that there was no economic benefit. However, the situation is different as lithium iron phosphate battery technology gradually matures and improves energy density and output. Once lithium iron phosphate batteries that do not require cobalt and nickel can be used, the battery cost will be halved within 18 months, and the business model will suddenly change from non-existent to established. Lithium iron phosphate batteries have greatly promoted energy storage.

The price will be competitive again when it drops to a certain level

The advantages of lithium iron phosphate batteries are not only cheap and safe, but also long service life. Now, energy storage projects using lithium iron phosphate batteries can increase the battery life from 10-15 years to 20 years, and the cost after amortization is lower. On the other hand, promote environmental awareness of electric vehicles and energy storage, review the high carbon emissions of nickel mining, and many cobalt production areas have human rights issues.

Although the main force of lithium batteries is still electric vehicles, energy storage is also growing rapidly, and the growth rate is far faster than electric vehicles. In 2024, the electric vehicle market will grow by 23%, but the energy storage market will grow by 51%. It is estimated that by 2030, energy storage will account for one-fifth of the lithium battery market.

Cobalt and nickel prices began to rise as the market predicted that the demand for lithium batteries for electric vehicles would continue to increase, which in turn stimulated cobalt and nickel mining companies to increase production. However, the growth of electric vehicles slowed down due to insufficient infrastructure and reduced subsidies from various countries, resulting in oversupply. The Democratic Republic of Congo, a major cobalt producer, and Indonesia, a major nickel producer, were both troubled by this. Cobalt prices fell by 60% in the past three years, and nickel prices fell by half. To make matters worse, the faster-growing energy storage market now mainstreams lithium iron phosphate batteries, leaving cobalt and nickel behind. As a result, the density of nickel used in lithium batteries will decrease by 33% in the four years to 2024, while cobalt will decrease by 66%.

LG Energy Solution (LGES), a major Korean battery manufacturer, is also considering switching to lithium iron phosphate batteries, so it withdrew from the "Titan Project" (Project Titan), a one-stop nickel production to battery production in Indonesia, and was taken over by Zhejiang Huayou Cobalt Industry of China. LG Energy Solution also stopped producing nickel-containing batteries at one of its factories in the United States and switched to manufacturing lithium iron phosphate batteries.

If the trend remains unchanged, cobalt and nickel prices may continue to fall, and the Democratic Republic of Congo and Indonesia will continue to have headaches. However, when the price of cobalt and nickel drops to a certain level, the price of cobalt-nickel batteries such as ternary batteries will become competitive again.

【Disclaimer】
The content of this article only represents the author's personal opinion and has nothing to do with Creating.
The content, textual description and originality have not been verified by this website. This website does not make any guarantee or commitment to this article and all or part of its content, authenticity, completeness, and timeliness. It is for readers' reference only. Please verify the relevant content yourself.

Creating Nano Technologies, Inc.
59 Alley 21 Lane 279, Chung Cheng Road, Yung Kang City, Tainan, TAIWAN
TEL:886-6-2323927 FAX:886-6-2013306 URL: http://www.creating-nanotech.com

BACK TO LIST