BYD to launch new lithium iron phosphate battery with 30% cost reduction

As subsidies for new energy vehicles have been drastically reduced, the lower-cost lithium iron phosphate battery is showing signs of "recovering". BYD, once a "firm representative" of this technology route, has once again revealed a new iron-lithium battery research and production plan. On August 22, BYD revealed at its performance exchange meeting that the new generation of iron-lithium batteries to be launched in May-June next year will have a 50% increase in volume-to-energy density, a lifespan of up to 8 years and 1.2 million kilometers, and a 30% cost reduction.

BYD Battery

The battle between lithium iron phosphate and ternary batteries has been going on for a long time. The former has the advantages of high stability and relatively low price, but the room for improvement in energy density is limited. As the leader in the field of lithium iron phosphate batteries, BYD has been working hard to break through its energy density ceiling. In 2018, BYD said that the energy density of lithium iron phosphate monomers was 165Wh/kg and the package was 140Wh/kg. In the next two years, it is planned to increase the energy density of monomers to more than 180Wh/kg and the package to 160Wh/kg.

In actual market applications, before 2017, lithium iron phosphate accounted for 70% of the installed capacity in the field of new energy vehicles . After new energy subsidies were tilted towards high energy density and long-range models, the market share of lithium iron phosphate batteries gradually declined, and the market share fell to 32% in the first half of this year. However, the decline in new energy subsidies is getting stronger and stronger. In view of the pressure to reduce costs, automakers are also turning their attention to lower-cost materials such as lithium iron phosphate.

Data from the China Chemical and Physical Power Sources Industry Association shows that in 2019, the market price of lithium iron phosphate battery cells has dropped to below 0.7 yuan/Wh, while the price of ternary battery cells hovered around 0.9 yuan/Wh, and the gap between the two began to widen. With the full withdrawal of subsidies in 2021, the price advantage of lithium iron phosphate will continue to stand out.

BYD has been opening up its battery supply to the outside world since 2018, and will split its entire battery business in the future to achieve independent listing. If the new generation of iron-lithium battery plan announced this time can be successfully implemented, it will greatly benefit BYD's competitiveness in power batteries and new energy policies, and will also help consumers buy new energy vehicles with longer battery life, greater safety and lower costs.