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The lithium iron phosphate battery market size is estimated to grow at a CAGR of 33.65% between 2022 and 2027. The market size is forecast to increase by USD 46,468.81 million. The growth of the market depends on several factors, including a decline in lithium-ion battery costs, increased government support for Electric Vehicles(EVs), and change in the energy mix.
This lithium iron phosphate battery market analysis report extensively covers market segmentation by application (automotive and non-automotive), type (portable and stationary), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The decline in the cost of lithium-ion batteries is notably driving the market growth, although competition from other batteries may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The decline in lithium-ion battery cost is notably driving the lithium iron phosphate battery market growth. Lithium-ion batteries are more expensive than lead-acid and nickel-metal hydride batteries. However, the manufacturing cost of lithium-ion batteries and the cost of battery packs have fallen significantly in recent years due to the increase in production scale and manufacturing efficiency. The cost of lithium-ion batteries decreased by about 85% between 2010 and 2018. The decline is also due to the increasing adoption of battery technology in the automotive industry and the development of more cost-effective production methods by suppliers.
Lithium-ion batteries account for a large portion of the manufacturing cost of electric vehicles, so falling prices are driving down the total cost of ownership of electric vehicles. Lithium-ion battery vendors are making their products more competitive than alternative technologies such as lead-acid and nickel-metal hydride batteries. The continuous research and development of lithium-ion batteries also improve the performance of automobiles. Lithium-ion battery prices are expected to continue to fall as capacity continues to increase due to strong demand for electric vehicles. The declining cost of lithium-ion batteries (including lithium iron phosphate batteries) coupled with government support for electric vehicles (EVs) and increasing demand for lithium-ion batteries will boost the growth of the market.
Growing investments in EV charging infrastructure is a key trend influencing the lithium iron phosphate battery market growth. Public charging facilities for electric vehicles are one of the main concerns of potential buyers. However, several initiatives and developments have been made to promote the acceptance of these eco-friendly vehicles around the world. Developments related to charging infrastructure depend on various framework conditions of national and supranational politics and local conditions. In addition, factors such as charging station deployment goals, regulatory issues, subsidy offerings, and funding mobilization for installation are important drivers for the development of electric vehicle (EV) charging infrastructure.
Both the public and private sectors are investing heavily in increasing the penetration of EV charging stations to boost EV adoption. In many cases, EV charging rates are expected to be similar to conventional vehicle refueling. Automakers and political groups are therefore investing heavily in research and development to accelerate charging speeds at public charging stations. Therefore, EV charging infrastructure will continue to evolve with the contributions of several key members of the EV value chain. This will directly increase the sales of electric vehicles, driving the growth of the market during the forecast period.
Competition from other batteries is challenging the lithium iron phosphate battery market growth. Lithium iron phosphate batteries face a high risk of being replaced by multiple energy storage technologies, including lithium-ion batteries that work on different chemistries, non-lithium-ion batteries, and fuel cells. Lithium-ion battery chemistries include lithium cobalt oxide, lithium manganese oxide, lithium nickel manganese cobalt oxide, lithium nickel cobalt aluminum oxide, lithium titanate, and solid-state batteries. All these chemicals have their own unique advantages. For example, Lithium Nickel Cobalt Alumina can have either high specific power or high specific energy. However, the inclusion of nickel improves the specific energy, making these batteries suitable for electric vehicles and power tools.
All-solid-state batteries are an evolutionary form of lithium-ion batteries, with significantly improved performance compared to lithium-ion batteries. All-solid-state batteries use a solid electrolyte instead of the liquid electrolyte used in lithium-ion batteries. Solid electrolytes result in higher battery energy densities at smaller sizes, providing longer life and improved battery safety. Significant research and development work is being done to improve this battery technology. Thus, the availability of numerous energy storage technologies will hamper the growth of the market during the forecast period.
The lithium iron phosphate battery market analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Lithium Iron Phosphate Battery Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Bharat Power Solutions: The company manufactures lithium iron phosphate batteries, lithium Ion batteries, and lithium polymer batteries.
The lithium iron phosphate battery market analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the automotive segment will be significant during the forecast period. The Automotive segment includes lithium iron phosphate batteries used in electric vehicles such as e-buses, e-trucks, and e-bikes. Lithium iron phosphate batteries are gaining popularity in electric vehicles due to their advantages over other lithium iron phosphate chemistries. These batteries operate with low resistance, resulting in higher efficiency, longer life, and higher reliability. Additionally, lithium iron phosphate batteries have a higher charge rate than other lithium iron phosphate chemistries, making them ideal for use in electric vehicles. This segment is expected to witness rapid growth during the forecast period owing to the popularization of electric vehicles.
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The automotive segment was valued at USD 2,579.20 million in 2017 and continued to grow until 2021. The growth of the automotive segment is due to the government's increasing focus on pollution from vehicle exhaust fumes. Electric vehicles(EVs) are a viable alternative to traditional internal combustion vehicles that run on diesel or petrol. EVs are gaining government support due to growing pollution concerns and the need for a cleaner energy mix. Many countries have set targets for EV deployment and offer subsidies and incentives to drive adoption. For example, the UK, France, Belgium, Norway, and the Netherlands offer subsidies for the purchase and ownership tax of electric vehicles. Additionally, several countries, such as France and the UK, have already announced plans to ban the sale of diesel vehicles in their respective countries by 2040. Some members of the value chain, such as governments, EV manufacturers, and private organizations, are stepping up efforts to install new EV charging infrastructure to further promote EV adoption.
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APAC is estimated to contribute 53% to the growth of the global lithium iron phosphate battery market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Asia-Pacific dominates the market as it is a major lithium iron phosphate battery manufacturing base. Compared to other regions, APAC has the highest number of providers. Additionally, some consumers of lithium iron phosphate batteries, especially electric vehicle original equipment manufacturers (OEMs), have manufacturing facilities in the region. Governments such as China and Japan are making concerted efforts to shift the focus from fossil fuel-powered vehicles to electric vehicles. They set goals and targets for the use of electric vehicles and passed several reforms to encourage their use. The government is also conducting research and development to improve the technology available to facilitate such vehicles. China and Japan are major contributors to the Asia-Pacific lithium iron phosphate battery market due to the high demand for electric vehicles in these countries. China leads the market due to its increasing acceptance of lithium iron. The main reasons are the low production cost of lithium iron phosphate batteries and the abundance of iron in the country. As a result, the battery type is experiencing high demand from the country's automotive sector.
The market has faced certain challenges since the beginning of 2020 due to the COVID-19 outbreak. The COVID-19 outbreak affected many countries across the world. Many countries imposed nationwide lockdowns to prevent the spread of COVID-19 in their communities. The outbreak impacted the world's broader economy, supply chains, and industrial and commercial sectors throughout 2020 and early 2021. The increasing incidence of COVID-19 hampered supply chains and related activities, subsequently impeding demand for lithium iron phosphate batteries until early 2021. However, the easing of travel restrictions, resumption of operations in the manufacturing sector, and massive COVID-19 vaccination campaigns fueled the growth of the market in 2021 and 2022.
The lithium iron phosphate battery market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the global lithium iron phosphate batteries market as a part of the global renewable electricity market within the global independent power and renewable electricity market. The parent global renewable electricity market includes companies involved in the generation and distribution of power from renewable energy sources. The global renewable electricity market size includes revenue generated by independent power producers' generation and distribution, gas and power marketing and trading professionals, and/or integrated energy traders and companies involved in renewable power. The market also includes manufacturers of raw materials and equipment used in the solar power market.
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Lithium Iron Phosphate Battery Market Scope |
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Report Coverage |
Details |
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Page number |
163 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 33.65% |
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Market growth 2023-2027 |
USD 46,468.81 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
32.67 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 53% |
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Key countries |
US, China, Japan, Germany, and Norway |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Acumentrics Inc, Bharat Power Solutions, Brunswick Corp., BYD Co. Ltd., Cegasa Energia SLU, China Aviation Lithium Battery Technology Co. Ltd., DNK POWER Co. Ltd., Dragonfly Energy Corp., E4V, Electric Vehicle Power System Technology Co. Ltd., Harding Energy Inc., K2 Energy Solution Inc., Lithium Werks, Murata Manufacturing Co. Ltd., OptimumNano Energy Co. Ltd., Power Sonic Corp., Saft Groupe SAS, TianJin Lishen Battery Joint Stock Co. Ltd., Ultralife Corp., and Victron Energy BV |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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