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Demand for lithium-iron-phosphate (LFP) batteries is on the rise as automakers look for ways to further reduce the cost of electric vehicles. Securing raw material supply to meet increased demand for batteries will continue to be a trend in coming years, with attention from automakers now turning to the phosphoric acid supply chain. The automotive sector currently represents about 5% of purified phosphoric acid (PPA) demand, but that number is expected to jump to 24% by 2030. This emerging demand will need to be satisfied by new sources of supply.
Furthermore, next-generation LFP and lithium manganese iron phosphate (LMFP) cathode chemistries are more energy dense, lower cost, and safer. These chemistries are expected to comprise a +40% share of cell demand by 2030. Thus, more phosphoric acid refining capacity will be needed as LFP demand increases.
As with some other battery raw materials, China has a dominant position in refining phosphate rock into PPA. The country had two-thirds of the global capacity in 2022. Securing sources of PPA supply outside of China will be necessary for the Western gigafactories.