(Bloomberg) — Electric-vehicle manufacturers in China are seen turning to cheaper batteries to slash costs and meet the needs of drivers in its megacities who don’t need to travel huge distances.
There’s been resurgent interest in lithium-iron-phosphate (LFP) batteries since the middle of 2019 when China started to rein in subsidies that had spurred adoption of more expensive, longer-range units using materials such as nickel and cobalt. The cost-competitiveness, safety and low sensitivity to commodity price dynamics of LFP batteries are boosting their popularity in the country, according to a report by BloombergNEF.
China’s biggest maker of new energy vehicles, BYD Co., said its latest cobalt-free battery will be in a new sports-utility model from the middle of this year.
Its Han SUV — with range of more than 600 kilometres (373 miles) per charge — will use a LFP battery that matches the range of nickel-cobalt batteries, the company said in a statement.
“It’s simply because LFP batteries provide the best value,” Gao Yuan, vice president of Chinese battery cathode producer Pulead Technology Co., said by Wechat. “Also, the visibility of costs is much better. If you ask someone what they think the cobalt or nickel price is going to be in 2025, you would get a long list of caveats.”
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