Investors looking at favourable forecasted LFP metrics are being set up for a sort of "trap". Classic proponents are Steve Levine from the Electric publication / podcast and also that Viking dude on YouTube
If you understand the current global battery supply chains it is clear why this is the case..
LFP is a China story, its their IP and their customers are low budget and don't mind shorter range. China is ahead of the curve when it comes to cell capacity pipeline, the west has been delayed. LFP will have a dominant position mid-decade, this is clear, but don't mistake this for the long term trend of the demand for the various metals. The western/korean autos will gain market share later as they get their cell manufacturing capacity online. western/korean autos prefer NMC and the growth rate of battery grade nickel and cobalt units will be strong later this decade and into next. that's the "trap" i refer to and i recommend not ignoring nickel & cobalt.
from a cathode chemistry perspective, it is well understood that LFP has reached its limit. improvements can be made from volumetric and pack weight efficiencies like CATL's QiLin format, but this is nothing to do with improvements in LFP itself. NMC on the other hand had a very significant runway ahead of itself for chemistry improvements.why this is important relates to customer preferences...
LFP is intrinsically terrible in the following due to complex electrochemical concepts i wont explore here, but they are:
- cold climates
- charge rates
- range.
i argue that most consumers coming from gas cars will be preferentially attracted to technology not hindered in these three categories. LFP cars are basically your "beginners EV" (which supports the mid-decade "bump" in demand) but the consumer market fit isn't great long term as they're highly restrictive to simple city runabout applications.
any customer with knowledge on batteries will take the nominal range of an EV and subtract 20-30% to get to real world range
then if you are in Europe or northern China or NE US / Canada you will subtract a further margin based on the cold climate
then if you do any highway trips and need a fast charge in a pinch you're out of luck
I concede improvements in battery technology, like solid state, will improve on LFP range somewhat
Also, currently, LFP is more reliable in terms of catastrophic failures.. but NMC is becoming more reliable as cell manufacturers learn about limits to cobalt thrifting and most importantly quality control of the cells (this is something SES have pioneered with their AI capabilities)
by the way LFP despite using abundant iron is equally supply constrained to NMC due to phosphate, few understand this niche field
