Lithium Iron Phosphate Batteries Market in India, 2024

LiFePO4 batteries find extensive use in storing energy generated from renewable sources like solar and wind, offering a dependable and eco-friendly energy storage solution. In India, the rising demand for Lithium-Iron Phosphate batteries is primarily driven by the increased adoption of electric vehicles, where LiFePO4 batteries are favoured for their safety, long cycle life, and thermal stability. The Lithium-Iron Phosphate battery market was valued at INR 32.95 billion in 2022. It is expected to reach INR 68.75 billion by 2028, expanding at a CAGR of ~12.05% during the 2023 - 2028 period.

Market Influencers:

Drivers

The rise in environmental concerns has sparked increased interest and investment in Lithium Iron Phosphate (LFP) batteries, particularly favored by grid and energy storage device manufacturers for their compact size, low self-discharge rate, and cost-effectiveness. While the decreasing prices of lithium-ion batteries drive the adoption of advanced technologies, challenges arise from the growing penetration of lead-acid and lithium-air batteries, along with the emergence of flywheel batteries, posing potential hurdles for manufacturers in the LFP battery space. The global demand for electric vehicles (EVs) is surging due to their environmental benefits, reduced maintenance costs, and growing consumer preference, prompting governments worldwide to set electrification targets by 2050. Countries like China, Japan, the US, Canada, and India have introduced regulations to promote EVs, and with the rising prices of traditional fuels, consumers are increasingly transitioning to electric vehicles. The lithium iron phosphate battery, known for its cost-effectiveness, non-toxic properties, and robust performance, is becoming a preferred choice in EVs, contributing to the projected sevenfold surge in global demand for lithium-ion batteries between 2022 and 2030.

Challenges

LiFePO4 batteries have a lower energy density compared to Lithium-ion batteries, evident in their limited capacity, such as the 1800mAh maximum for a LiFePO4 18650 battery versus 3600mAh for a Panasonic Lithium-ion 18650 battery. This drawback stems from the diminished energy density inherent to LiFePO4 chemistry in contrast to other lithium-ion variants like NMC or NCA, potentially requiring more physical space for equivalent energy storage, despite exhibiting an energy density range of 150-170 Wh/kg and an extended life cycle. LiFePO4 batteries exhibit reduced performance at -20 degrees, whereas low-temperature Lithium-ion or Lithium Polymer batteries can discharge at -40 degrees and deliver 70% - 80% Depth of Discharge (DOD). The production of lithium iron phosphate battery packs is a sophisticated process requiring meticulous control over environmental factors, and the limited conductivity and slow lithium iron diffusion in these batteries’ present challenges, hindering widespread adoption of the technology, particularly during high-rate charging and discharging.

Market Trends:

Innovators in the LiFePO4 battery sector are striving to increase energy density, aiming to achieve extended runtimes and enhanced performance across applications like electric vehicles and renewable energy storage. This enhancement primarily targets the storage of more energy per unit of weight or volume. The integration of LiFePO4 batteries with renewable energy systems, such as solar and wind power, facilitates the storage of surplus energy, ensuring a consistent power supply despite the intermittent nature of these renewable sources.