Catl LFP breakthrough poses questions as well as answers

Range of 400km on a ten-minute charge. Overall range of 700km+. The first 4C — i.e. a charging capacity rate equal to reaching a full charge in fifteen minutes — lithium iron phosphate (LFP) battery. Improvements both in performance during cold weather and in safety.

There is a lot to like about the announcement by Chinese battery heavyweight Catl of its new Shenxing battery technology. But battery experts are cautioning that some of what Catl is not saying about it could be as important as what it is.

And the breakthrough by a Chinese firm also serves as a reminder of the dichotomy the US and EU are facing. Both want to build out EV battery supply chains with reduced dependence on China.

But, if Chinese knowhow is at the core of how a next generation of LFP batteries are made, it re-ups the question of how independent of China the huge investments — and for years to come higher-priced batteries and EVs (once government subsidies are stripped out) compared to not developing these domestic/nearshored supply chains and simply buying Chinese — will really make the West.

Fineprint

Catl specs of 400km of range from a 10-minute charge, taking the battery from 10pc to 80pc, suggests to Exawatt, a technology, manufacturing and materials consultancy owned by metals information firm CRU, that the battery tested was 85kWh, charging at 350 kW. Exawatt cautions that this is under controlled conditions and real-world performance may vary, but “achieving these speeds with LFP would be a significant breakthrough given its inherent cost, safety, and lifespan advantages over high-nickel chemistries”.

Catl “promises exceptional cold resistance”, which “would amount to retaining the advantages of LFP batteries — low degradation, longevity, cost — without its main disadvantage”, agrees Lionel Miquet-Troisvalets of automation firm Turck. Catl says Shenxing will allow a 0-80pc charge in just 30 minutes in temperatures as low as -10°C.

But battery experts note that there are certain discrepancies in the Catl figures. At an overall range of 700km, going from 10pc to 80pc would be from 70km to 560km — an addition of 490km, not the 400km highlighted by Catl.

Steve LeVine, editor of battery and EV publication The Electric, also notes that information provided by Catl thus far “excludes cycling data, including how frequently 4C can be used”.

China question

The Chinese firm promises that mass production of Shenxing will be achieved by the end of this year, and EVs equipped with Shenxing will be available on the market in the first quarter of next year. This could, of course include vehicles produced by the world’s market-leading EV maker, US OEM Tesla, which is one of Catl’s major customers.

“This explains why Tesla is lowering prices in China: to remove unsold cars from warehouses — waiting, within a year, to have cars with a range of 700km and [higher] charging speed,” suggests Ernesto Ciorra, until last month head of innovation and sustainability at Italian utility Enel.

It remains to be seen exactly how much Catl’s LFP leap forward puts them ahead of its competitors and how long any lead can be maintained. But, if there was a period where the most competitive EVs on range and cost could be produced only be OEMs using Shenxing batteries, it could dramatically alter the competitive landscape.  

In the first four months of this year, although Catl was the global leader with a 35.6pc market share according to South Korea-based SNE Research, the firm was second to South Korea’s LGES in global sales excluding China. Fellow Korean firms SK On and Samsung SDI and Japan’s Panasonic also have material positions in the ex-China market, while Chinese battery and automaker BYD — second in the world including China with over 16pc market share — has less than 2pc of global ex-China sales.

But Korean expertise is largely in nickel manganese cobalt (NMC) chemistries, not LFP. So there is a question on how quickly they could catch up if the EV market made a decisive shift to LFP that was able to offer performance parity to NMC while being cheaper and safer. It would also pose questions about big investments OEMs have made in North American gigafactories with South Korean partners.

And there could also be issues around ongoing US political enthusiasm for gigafactories — such as those operated or planned by Tesla or fellow US OEM Ford — qualifying for Inflation Reduction Act (IRA) subsidies if they are exclusively utilising Catl LFP technology, especially if more of them popped up. Ford has already had a letter from the chairs of the House Select Committees on the Chinese Communist Party on Ways and Means demanding answers on its Catl patnership, including around "Ford’s future reliance on Chinese technology, minerals, and employees".

"There are reasons to question whether the structure of Ford’s deal will in fact contribute to the promised advancements in domestic battery technology," the Representatives wrote.

The EU could face a similar dilemma, particularly as Catl already has its own — rather than an OEM or other third party-owned — battery plant up-and-running in Erfurt, Germany and is constructing a second in Debrecen, Hungary. The firm’s chairman Robin Zeng spoke in June of its ambitions to also deepen cooperation with French OEMs.

Domestic rivals

There are US homegrown contenders hoping to muscle in on a shift to LFP, both as battery makers and materials providers. While they are much less far down the road than Catl, they are progressing.

Earlier this week. Michigan-based ONE unveiled its Aries II LFP battery pack, which it says offers more than 350 miles of range for a typical passenger EV and energy density of 263Wh/L and 162Wh/kg, 34pc and 23pc improvements over the leading LFP pack benchmark. But start of production is not slated until late 2024.

Also this week, California-based battery materials firm Mitra Chem announced the completion of a $40mn first close of it $60mn Series B funding round led by US auto heavyweight GM.  As part of its GM partnership, the firm will develop iron-based cathode active materials like lithium manganese iron phosphate.

Mitra Chem hails itself one of the only US-based iron-based cathode manufacturers that enable purchasers of US-made EVs to qualify for the full suite of tax credits passed in the IRA, reinforcing the importance for OEMs who want to get the list price of their EVs down of having IRA-compliant suppliers across the value chain.

Mitra Chem's next year of production is covered by requests for samples from potential customers “including nearly every global Tier 1 battery cell maker and multiple household name automotive OEMs”. This speaks to the appetite for LFP, and particularly for non-China LFP. But a whole year of production met by sample requests also serves as a reminder of how far away this US contender is from scale.