Industry Insights | An In-Depth Exploration of the Unsung Heroes Behind Lithium Batteries

The positive electrode material is a key component of lithium batteries and is crucial for performance. The main indicators for evaluating the performance of lithium batteries include energy density, cycle life, charge rate, safety performance, etc. The positive electrode material plays a decisive role in the performance of the battery such as energy density and voltage.

Source: Analysis by Frost & Sullivan

The differentiation of cathode materials is high, with multiple technical routes. Currently, the mainstream technical routes mainly include ternary materials, lithium iron phosphate, lithium cobalt oxide, and lithium manganate. Different cathode materials vary in terms of energy density, cycle life, cost, safety, low-temperature performance, etc., meeting different application scenarios accordingly. Based on the different cathode materials, lithium batteries can be divided into lithium cobalt oxide (LCO) batteries, lithium manganate (LMO) batteries, lithium iron phosphate (LFPBatteries and ternary lithium batteries. Among them, ternary lithium batteries can be further divided into NCM523, NCM622, NCM811, NCA, etc., depending on the ratio of nickel, cobalt, and manganese/aluminum.

Specifically, ternary cathode materials combine the characteristics of nickel, cobalt, and manganese/aluminum elements to enhance the overall performance of cathode materials. They possess good electrochemical performance, good cycle performance, and high energy density, making them widely used in the field of new energy vehicles, although the cost is relatively high. In response to the demand to increase energy density, it is expected that ternary cathode materials will develop towards higher nickel content in the future.

Lithium iron phosphate has advantages such as low cost, high cycle count, and good safety. However, its main drawback is low energy density, which makes it mainly used in new energy vehicles and energy storage fields. However, with the improvement of battery structure technology, the energy density deficiency of lithium iron phosphate has been improved, significantly increasing its current penetration rate in the new energy vehicle market.

Lithium cobalt oxide, as the first-generation commercialized lithium battery cathode material, is widely used in small batteries due to its advantages such as high bulk density, stable charging and discharging, and high operating voltage. However, it also has disadvantages such as expensive cobalt prices and poor cycle performance. Currently, it is mainly applied in the 3C consumer electronics field.

Lithium manganate has advantages such as abundant manganese resources, low cost, and good safety performance, but it also has disadvantages such as low energy density and poor cycle performance. Lithium manganate batteries are mainly used in low-speed vehicle application scenarios where cost is a concern and the requirement for range is relatively low, and they have unique advantages.

The lithium battery cathode material industry chain consists of three parts: raw material suppliers, precursor manufacturers, cathode material manufacturers, and lithium battery manufacturers.

In the upstream of the industrial chain, raw materials mainly include cobalt sulfate, nickel sulfate, manganese sulfate, aluminum sulfate, cobalt chloride, etc. In the midstream of the industrial chain, manufacturers of precursors and cathode materials are the core participants in the lithium battery value chain. Precursors mainly includeternary precursorCobalt oxide, iron phosphate, etc. Cathode materials mainly include ternary materials, lithium cobalt oxide, lithium iron phosphate, lithium manganese oxide, and other cathode materials. Due to differences in energy density, cycle life, safety, cost, and other characteristics, they are used to manufacture different types of lithium batteries. The downstream participants in the industrial chain refer to lithium battery manufacturers.

Source: Analysis by Frost & Sullivan

The driving factors for lithium battery cathode materials mainly include the acceleration of electrification in automobiles, technological progress, the application of new consumer electronics products, and supportive government policies.

Automobile electrification rate:The low-carbon economy has become the main direction of global development in the future. The global process of electrification of vehicles is accelerating, and traditional automakers as well as new automotive forces continue to speed up their deployment of new energy vehicle businesses. It is expected that from 2022 to 2026, the global shipments of new energy vehicle lithium batteries will grow at a compound annual rate of over 30%, thereby driving the development of the global lithium battery cathode material market.

Source: Analysis by Frost & Sullivan

Technological Progress:With the development of technologies such as 5G, the Internet of Things, and sensor technology, consumers have put forward higher requirements for the functionality and performance of mobile terminal devices such as smartphones, laptops, and tablets. Specifically, the demand for long battery life will drive the upgrade of lithium batteries and the improvement of energy density, promoting the development of the lithium battery cathode material market in terms of quantity and quality.

Applications of New Consumer Electronics Products:In recent years, new consumer electronics products such as smart wearable devices and consumer-grade unmanned aerial vehicles (UAVs) have developed rapidly. With the continuous increase in the application of new consumer electronics products, it will continue to drive the growth of lithium battery applications and upstream cathode materials.

Supportive policies:In recent years, governments around the world have successively introduced plans to stop developing traditional fuel vehicles and provided a series of subsidies and policy support for new energy vehicle batteries. In 2020, the Ministry of Industry and Information Technology issued the "New Energy Vehicle Industry Development Plan (2021-2035)", encouraging the implementation of breakthrough projects in new energy vehicle battery technology, research on core technologies, development of high-strength, lightweight, high-safety, low-cost, and long-life new energy vehicle batteries, and accelerating the research and industrialization of solid-state new energy vehicle battery technology. In Europe, to support the EU's dual carbon goal by 2050, the European Investment Bank announced support for new investments including 2 billion euros to cultivate different renewable energy projects in multiple European countries. With policy support, the global new energy vehicle battery industry and lithium battery cathode material market will enter an accelerated development phase.

Ternary cathode materials and lithium iron phosphate cathode materials dominate the lithium battery cathode material market, accounting for more than 80% of the total market share. This is mainly due to their wide application in new energy vehicles and energy storage batteries. Ternary lithium batteries have higher energy density, higher charging efficiency, and better low-temperature adaptability.

Ternary cathode materials have become one of the cathode materials with the largest market scale. Coupled with their huge application prospects in the field of new energy vehicles in the future, enterprises that entered the industry earlier hold a relatively high market share. However, with the continuous favorable development of the new energy vehicle industry, new entrants keep pouring into this field. The main Chinese lithium battery ternary cathode material enterprises includeRongbai Technology, Ascend Technology, Changyuan Lithium, Zhenhua New Materials, Xiamen Tungsten, Shanxiang Co., Ltd., etc.

The four core materials in lithium batteries include cathode materials, anode materials, separators, and electrolytes. Among them, cathode materials are the key components of lithium batteries and are crucial for performance. With the acceleration of electrification in automobiles, technological progress, the application of new consumer electronics products, and supportive government policies, cathode materials for lithium batteries will continue to develop rapidly.