lithium shortage<\/a>, which could delay global efforts to manufacture enough BEVs to meet anticipated consumer demand in 2030. The most recent APC projections demonstrate that the global lithium deficit in 2030 could reveal the anticipated manufacture of 40 million BEVs reduced to just 25 million in that constrained scenario.<\/p>\nUsing LFP in car batteries: Becoming a global preference<\/h3>\n
The use of LFP in car batteries has historically been favoured by manufacturers in China. Adoption outside of China was limited due to the various IP arrangements and perceived higher energy density of NMC cells. However, recent improvements in the energy density of LFP batteries, as well as potential superior safety, cost reduction, cycle life, and reduced material supply concerns, have resulted in many OEMs revisiting their battery strategies.<\/p>\n
Thus, several leading vehicle manufacturers have either expressed their intent or communicated interest in introducing LFP batteries. Tesla has been a first-mover on this with approximately 50% of their global vehicle deliveries in Q1 2022 being LFP variants.<\/p>\n
European OEMs, such as Volkswagen, producing entry-level segment vehicles will likely lead the charge in LFP adoption across the region. However higher performance segments, such as large vans and sedans, could also see a modest interest in LFP, especially where battery durability is important. A wide spectrum of other OEMs, from new start-ups, such as Rivian to established OEMs like Ford, have now pledged to utilise LFP batteries in larger vehicle models.<\/p>\n
The importance of meeting the demand for BEV production<\/h3>\n
Irrespective of the proportions of LFP, NMC or other chemistries adopted globally, battery-grade lithium will still be in demand in vast quantities. \u201cThe lithium industry is still relatively small compared to other technology metals, and we understand the challenges this industry faces in scaling up to meet the demands of BEV production over the coming years,\u201d explained Julian Hetherington, Automotive Transformation Director at APC.<\/p>\n
\u201cThe UK government and industry are rightly investing in building Gigafactories to not only secure vehicle assembly, but also energise a UK supply base for high-value components like cathodes and anodes. However, we also recognise the importance of securing stable material supply chains. That\u2019s why the APC has supported UK feasibility study projects exploring lithium extraction and refining via our Automotive Transformation Fund.\u201d<\/p>\n
Investing in supply is only one side of the lithium equation<\/h3>\n
\u201cIn the face of a future lithium squeeze, the industry needs further investments to increase the supply of lithium chemicals and enact measures that reduce our demand for it,\u201d noted Luke Bates, Automotive Analyst at APC.<\/p>\n
\u201cWe cannot rely solely on supply-side measures to increase the primary supply of battery-grade lithium or think recycling is a silver bullet. Using smaller or modular batteries, introducing sodium-ion in entry-level vehicles, and adopting fuel cells for larger, heavier vehicles are all potential pathways we could explore.\u201d<\/p>\n