The cheaper chemistry neared half of world sales in 2024
Lithium iron phosphate, a battery chemistry known as LFP, uses iron and phosphate in its cathode instead of nickel, manganese and cobalt, the 3 metals in the more common chemistry called nickel manganese cobalt, or NMC. The Volta Foundation, a global battery industry group, reports that the share of global electric vehicle battery sales held by LFP rose from 38% in 2022 to 41% in 2023 and reached nearly 50% in 2024, figures the group sourced to the International Energy Agency. China, the largest electric vehicle market in the world, already makes 75% of its electric vehicle batteries with the cheaper chemistry. Europe came to it later. Its share there doubled in a single year, reaching 10% in 2024.
The 2024 figure is described in the source as nearly 50%, plotted here as 50.
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| 2022 | 38 |
| 2023 | 41 |
| 2024 | 50 |
The cheaper chemistry actually costs less
Automakers keep switching because the cheaper chemistry really is cheaper. A kilowatt hour, the unit that measures how much energy a battery can store, of LFP battery pack cost an average of 81 dollars worldwide in 2025. A kilowatt hour of nickel manganese cobalt pack cost 128 dollars the same year, both figures from the Volta Foundation report. That gap is why BYD builds its full lineup on the cheaper chemistry and why Tesla uses it in the standard range trim of the Model 3, the report states, and it is why Ford, Rivian, Stellantis, Mercedes Benz, Volkswagen and Toyota are now scaling it up too.
United States manufacturers shifted capacity toward it
United States battery manufacturers are moving the same direction, for the same reason, even as demand for electric vehicles in the country has run below what the industry expected. Tier 1 manufacturers, the largest suppliers that sell finished battery packs to automakers, cancelled or suspended 195 gigawatt hours of planned nickel chemistry battery capacity in a single year, a gigawatt hour being one million kilowatt hours. They transferred another 109 gigawatt hours of joint venture capacity to other owners. A further 190 gigawatt hours of planned capacity was reallocated specifically to LFP production instead, according to the Volta Foundation report, which names the CRU Group as its data source for these 3 figures.
Figures cover Tier 1 battery manufacturers only, and are sourced by the Volta Foundation report to the CRU Group.
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| Cancelled or suspended | 195 |
| Transferred to another owner | 109 |
| Reallocated to lithium iron phosphate production | 190 |
A federally funded plant collapsed before it reached production
Demand for the cheaper chemistry in the United States is real. Building the factory to supply it domestically has proven much harder. ICL Specialty Products took up to 197.4 million dollars from the United States Department of Energy to build a plant in St Louis, Missouri, designed to produce 30,000 metric tons of LFP cathode powder a year, using technology licensed from the Taiwanese company Aleees. The total project cost, combining the Department of Energy share and the cost paid by ICL itself, came to 24,255,499.74 dollars. ICL received notice in October 2025 that the grant was terminated. The board of ICL then decided not to continue with the project, and the plant never reached production. The 190 gigawatt hours the Volta Foundation counted moving toward LFP were compiled independently of the ICL project, so the wider shift toward the cheaper chemistry did not stall even as this one attempt to supply it inside the United States failed.