Lithium Iron Phosphate (LiFePO4) Material and Battery Market Report

Lithium Iron Phosphate (LiFePO4) Material and Battery Market Analysis By Raw Material (Graphite, Lithium Iron Phosphate, Lithium Fluoride), By Application, By Region, And Segment Forecasts, 2014 - 2025

Published: May 2017  |  112 Pages  |  Format: PDF  |  Report ID: GVR-1-68038-468-0

Industry Insights

The global lithium iron phosphate (LiFePO4) material and battery market size was estimated at USD 4.76 billion in 2016. These batteries find application in consumer electronics, electric & hybrid electric vehicles and renewable power generation systems. Growing demand for electric vehicles is expected to play a major role in the growth of this market over the forecast period.

Ethylene carbonate, which is used as an electrolyte in these batteries, dominated the U.S. raw material market in 2016. Due to its excellent solubility, it is also used in pigments, dyes, and plastics, apart from batteries. Some of the major producers of this chemical were Mitsubishi Chemical, Huntsman, Asahi Chemical, BASF, and Shandong Senjie Chemical.

U.S. lithium iron phosphate material & battery market by raw material, 2014 - 2025 (USD Million)

U.S. lithium iron phosphate material & battery market

The demand in the U.S. was driven by growing concerns regarding environmental degradation due to pollution from fossil fuels. The presence of major manufacturers and suppliers with wide distribution networks is also expected to propel the demand over the next eight years in this country.

The lithium iron phosphate material & battery market is highly competitive with the presence of a large number of companies mostly in the U.S. and China. However, operations of the companies are in multiple locations with manufacturing facilities and distribution carried out across various locations along with third party distribution agencies.

Extensive R&D for development of effective and high-quality products was another initiative undertaken by the manufacturers. In January 2016, Valence signed a strategic alliance with EaglePicher Technologies, LLC which enabled the company to increase its lithium ion-based product portfolio.

Raw Material Insights

Major raw materials in lithium iron phosphate batteries include graphite, ethylene carbonate, lithium iron phosphate, lithium fluoride, and others. The market for graphite, which accounted for 27% by revenue in 2016, is projected to witness the highest demand over the forecast period. Since this material is used as an anode in these batteries, its importance has gone up in this industry, which has been one of its major growth drivers.

Lithium iron phosphate is projected to grow at the second-highest CAGR of 22.4% by revenue, from 2017 to 2025. The use of this material has helped solve problems of overheating and consequent explosions of batteries. Thus, it was widely used in power generation plants and automobiles.

Lithium fluoride held a share of 9.4% by revenue in this industry, in 2016. It is one of the vital components of the electrolyte used in these batteries. By using this chemical, the storage capacity of a battery can be increased considerably, which is an important property in the automobile application. These advantages have made lithium fluoride an indispensable raw material in these batteries.

Application Insights

Consumer electronics, electric & hybrid electric vehicles, and renewable power generation were major applications of lithium iron phosphate batteries. The electric & hybrid electric vehicles segment is expected to grow at the highest CAGR over the forecast period.

Global lithium iron phosphate material & battery market by application, 2016 (%)

Global lithium iron phosphate material & battery market

Electric & hybrid electric vehicles held the largest share of 57.6% by revenue in 2016. Growing demand for plug-in light vehicles (PEV), which grew at an astonishing CAGR of 83.4% from 2012 to 2015 was the major factor driving the market in this segment. Rising fossil fuel prices and pollution emission due to their consumption has prompted the consumers to switch to electric vehicles.

China and the U.S. were major markets for electric vehicles in 2016 and accounted for 34% and 30% of the global electric vehicle sales in 2016, respectively. Supportive government regulations coupled with incentives and subsidiaries to electric vehicles have driven their sales in these countries.

The consumer electronics segment held the second-largest share of 21.2% by revenue, in 2016. This segment includes cameras, mobile phones, computers, and laptops. High stability of these batteries at high temperatures has increased their demand in this segment. The growth in this segment was also attributed to the consolidation of the electronics sector, particularly in the Asia Pacific region, since the economic slowdown from 2007 to 2009.

Regional Insights

Asia Pacific witnessed the highest demand for lithium iron phosphate batteries in 2016 due to growing demand from the electric vehicles and renewable power generation segments. This region is also projected to grow at the highest CAGR of 22% in terms of revenue, from 2017 to 2025.

Due to high population and emerging economies in China and India, Asia Pacific was the largest consumer of electric vehicles in 2016. The presence of major hybrid electric vehicle manufacturers including Toyota, Nissan, and Hyundai have played a huge role in the preventing the prices of these vehicles escalating in this region. Easy availability of rare earth elements such as lithium in China has also been a key factor driving the market in this region.

Europe accounted for 16.5% of the global demand in 2016. The market in this region was dominated by electric & hybrid electric vehicles in 2016. Since these vehicles are pollution-free, almost sound-proof and offer high fuel efficiency as compared to vehicles running on fossil fuels, they have gained tremendous popularity in this region.

Norway, a small country in Europe, was one of the largest consumers of electric vehicles in 2015. It recorded sales of 26,000 electric vehicles out of the total sale of 151,000 passenger vehicles in the same year, which accounted for more than 17% of the vehicles sold. The electric vehicles in this country are given incentives such as an access to bus lanes instead of regular traffic roads and free parking, in order to promote them. Such initiatives taken by governing bodies have driven the market for these batteries in this region.

Competitive Insights

A123, BYD, GAIA, and Valence were the major players in 2016 and accounted for the majority of the market share. Expansions and investments were the key strategies adopted by the players from 2011 to 2017 in order to strengthen their market position. For instance, in June 2015, A123 outlined a new expansion plan to double its manufacturing capacity from 1.5 GWh to 3 GWh within the next three years with investments in manufacturing plants in China and the U.S.

Numerous manufacturers were seen collaborating with other companies in order to develop new opportunities for their products. This was evident from the agreement signed between A123 and Tata Motors in March 2012, to supply lithium iron phosphate batteries to its commercial vehicles.

Report Scope

Attribute

Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2016

Forecast period

2017 - 2025

Market representation                                                

Raw material volume in kilo tons, battery volume in megawatt hour, revenue in USD Million and CAGR from 2017 to 2025

Regional scope

North America, Europe, Asia Pacific, Central & South America, Middle East & Africa

Country scope

U.S., Germany, UK, China, Thailand, India, Brazil

Report coverage             

Revenue forecast, company share, competitive landscape, growth factors and trends

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Segments covered in the report

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global lithium iron phosphate (LiFePO4)material and battery market on the basis of raw material, application, & region:

  • Raw Material Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)

    • Ethylene carbonate

    • Phosphorous trichloride

    • Phosphorous pentachloride

    • Graphite

    • Lithium Fluoride

    • Lithium iron phosphate

    • Polyvinylidene Fluoride

    • Others  

  • Application Outlook (Volume, Megawatt Hour; Revenue, USD Million, 2014 - 2025)

    • Consumer Electronics

    • Electric vehicles and hybrid electric vehicles

    • Renewable power generation

    • Others

  • Regional Outlook (Volume, Kilo Tons, Megawatt Hour; Revenue, USD Million, 2014 - 2025)

    • North America

      • U.S.

    • Europe

      • Germany

      • UK

    • Asia Pacific

      • China

      • Thailand

      • India

    • Central & South America

      • Brazil

    • Middle East & Africa

Key questions answered by the report
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