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CATL to build new $280M, 80 tpy LFP cathode materials plant in China

24 January 2021​

China-based battery maker CATL (Contemporary Amperex Technology Co. Ltd.) and its subsidiary Shenzhen Dynanonic Co., Ltd. signed an agreement with Jiang’an county government (located in south-west China’s Sichuan province) to build a lithium iron phosphate (LFP) cathode materials plant with a production capacity of 80 tpy. The construction of the plant is expected to be completed in three years, with a total investment of US$280 million,Greencarcongress.com reports.
In a speech at the China EV100 conference, CATL Chairman Zeng Yuqun observed that global lithium battery market demand will increase significantly starting this year, but added that the growth of capacity supply in the entire industry chain is relatively slow, and effective supply is insufficient.
CATL, he said, has over the years formed four innovation systems: material system; system structure; extreme manufacturing; and business model.
“First of all, material system innovation is very important. For a certain period in the future, lithium iron phosphate and ternary materials still have room for improvement, and they are still the absolute mainstream of application. Afterwards, some new systems may emerge. It is necessary to start from the atomic scale, deeply understand materials and their interface properties, achieve a fundamental breakthrough in the material system, avoid many precious metals, and take a more cost-effective way to deal with long-term, huge market demand”, added Zeng Yuqun.

Metals, minerals and chemical industries consultancy Roskill said that in 2020, LFP accounted for around 20% of global cathode materials production. In 2021, the market share of LFP cathode materials is forecast to increase to 25%.
Roskill said that in 2020, the installation of LFP batteries in EVs is reported to have increased by around 21% y-o-y, to 24.4 GWh in China, and the upward trend is expected to remain in 2021. Roskill attributes a wider use of LFP in EVs partly to technology improvements, boosting driving ranges of EVs, coupled with price competitiveness and safety benefits.
Earlier in January, Guoxuan High-tech launched its new-generation LFP cell, with an energy density of 210Wh/kg—a similar level to NCM523 battery cells. At the pack level, module-less pack designs, including CATL’s Cell to Pack and BYD’s Blade Battery, have allowed more LFP cells to be placed into the pack than previous technologies.
The use of LFP in other applications, such as stationary ESS and water transportation, is forecast to increase as well. As reported by Roskillpreviously, despite the effects of the COVID-19 pandemic, the electrification of vessels has not shown any signs of slowing down in China. In 2020, around 70MWh of LFP batteries were installed in Chinese electric vessels, equivalent to more than 1,270 Tesla Model 3 vehicles with LFP batteries.
CATL has invested heavily in LFP battery production. Besides the expansion of connections with downstream clients, CATL has been actively moving towards an upstream position to gain a source of captive LFP cathode materials. This would grant the company a strong foundation to deal with the impending changes to the global Li-ion battery market, Roskill said.