Ford, VW, Tesla Lean In To LFP Battery Technology For EVs

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(Credit: Tesla)

Major automakers including Ford, VW and Tesla are increasingly leveraging lithium-iron-phosphate (LFP) for electric vehicle (EV) batteries, substituting for the more commonly used nickel or cobalt formulations, to capitalize on lower costs.

Thus far, VW’s CEO Herbert Diess has committed to using LFP in the company's entry-level EVs to bring down prices and Ford confirmed earlier this year that it will be using LFP in its commercial EVs. In late July, Elon Musk indicated that Tesla is making a “long-term shift” toward LFP in its energy storage products and some entry-level EVs.

Switching to LFP, away from nickel or cobalt, also helps to reduce human rights issues over mining, such as child labor at mining sites, that have hit Tesla and other major companies including Google, Microsoft and Apple in the past two years. 

Even though it’s a dated technology invented in the 1990s, LFP has contributed significantly to lower battery costs, which is important to accelerating mass EV adoption. Last year, lithium-ion battery pack prices dropped 89% in real terms to $137/kWh compared to 2010 prices and average prices will be close to $100/kWh by 2023, according to BloombergNEF, with LFP batteries contributing to the lowest reported prices of $80/kWh. At the $100/kWh price point, BNEF expects automakers will be able to produce and sell mass market EVs at price parity with internal combustion vehicles in some markets. 

If the trend continues and expands to other automakers, the implications are considerable. The mining industry has in recent years banked on nickel and cobalt, the main chemistries used in batteries for almost every major EV sold today. The trend could also undermine China, which currently has a dominant control over the critical raw materials used for making batteries, including lithium, cobalt and graphite.

Environment + Energy Leader