Lithium Iron Phosphate Batteries Market To Generate Revenue Worth $35,195 Million by 2030

The global lithium iron phosphate batteries market is projected to generate USD 35,195 million revenue by 2030, advancing at a CAGR of 13.40% during 2022–2030. This can be ascribed to the growing industrial automation space, increasing demand for LFP batteries in the automotive sector majorly in EVs, and innovative developments in lightweight materials.

Compared to other lithium batteries, lithium iron phosphate batteries (LiFePO4 or LFP) have several advantages, such as improved discharge and charge efficiency, maximum safety, no maintenance, lightweight, and longer life term. Although these batteries are not the most affordable in the market, they are the best long-term investment due to their extended lifespan and lack of maintenance.

Automotive Industry Is Dominating the Industry

The automotive category held the largest revenue share, of more than 34%, in 2022. This is attributed to the increasing demand for EVs, owing to the transition toward the adoption of cleaner energy by various economies of the world. Thus, the acceptance and popularity of electric vehicles are rising. For instance, EV sales made up 5.6% of the overall vehicle market in Q2 2022 (up from 2.7% in Q2 2021). People are switching to electric vehicles because they use cleaner energy and offer better performance. Also, government subsidies continue to support the use of electric vehicles.

Moreover, the stationary application category is projected to have significant expansion in the coming years. This can be attributed to the surging requirement to shift to renewable energy sources, such as solar and wind energy, for sustainable and clean energy. It is expected that huge investments will be made in both the commercial and public sectors, as a result of the shift to renewable energy, which will boost the need for such batteries.

Europe holds the second-largest share in the lithium iron phosphate batteries industry, owing to the increasing sustainability concern in the region. By 2030, electric vehicles will account for one-third of all used car sales in the U.K., which is expected to fuel a healthy second-hand market for environmentally conscious solutions. By the end of the decade, battery electric vehicles will account for about 31% of yearly used car sales. Just under 0.4 million cars, or 1.3% of all vehicles on the road in 2021, were electric vehicles. The percentage will roughly increase to 6% by 2025 and to 19% by 2030.

Germany is renowned for its strong engineering and automotive sectors. German automobiles represent the highly appreciated characteristics of innovation, dependability, safety, and design throughout the world. Germany is by far the largest market for the sales and production of EVs in Europe. The nation's top-notch R&D infrastructure, full industry value chain integration, and extremely skilled workforce create an advanced automotive atmosphere on a global level. It enables organizations to develop cutting-edge solutions that properly meet the mobility needs of the future.

The government's Zero Emission Vehicle Mandate, which will command automakers to sell a specific number of electric cars each year, is set to go into effect in 2024, so likely this number will be higher. Over the coming years, it is projected that the annual sales of used BEVs would steadily rise in the country. These factors drive the demand for LFP batteries.

The major players operating in the lithium iron phosphate batteries market include BYD Co. Ltd., Contemporary Amperex Technology Co. Limited, A123 Systems LLC, Shenzhen Taico Technology Co. Ltd., K2 Energy Solutions Inc., Lithium Werks Inc., BSLBATT, Electric Vehicle Power System Technology Co. Ltd., Benergy Tech Co. Ltd., and RELiON Battery LLC.