Hyundai's Development of Affordable LFP Batteries Set for Late 2024
【Summary】Hyundai is set to complete the development of its own lithium iron phosphate (LFP) batteries by late 2024. LFP batteries are cheaper, safer, and more efficient, making them an attractive option for automakers. Hyundai's goal is to improve the LFP battery's capacity and energy density to similar levels as more expensive alternatives. This development will enable Hyundai to offer more affordable electric vehicles (EVs) and reduce reliance on Chinese battery makers.
China's dominance of the supply chain for battery materials is well-established, but other countries are actively working to reduce their dependence on China. In the United States, the Inflation Reduction Act was introduced last year with the goal of breaking free from China's supply chain. Similarly, South Korea is also making efforts in this direction, particularly in the development of lithium iron phosphate (LFP) batteries.
Hyundai Motor Group, a Korean giant in the automotive industry, is expected to complete the development of its LFP technology by late next year. Local media reports suggest that this advancement could lead to cheaper and easier-to-scale electric vehicles (EVs) from Hyundai.
LFP batteries have gained popularity among automakers due to their affordability, safety, and efficiency. Many automakers, including Toyota and Ford, have started incorporating LFP batteries into their entry-level models. However, China currently holds a quasi-monopoly on LFP technology, prompting Western automakers to develop their own LFP batteries to reduce dependence on China amidst the ongoing tech trade war. Ford, for instance, paused the construction of an LFP battery plant in Michigan due to concerns about its Chinese technical partner, CATL.
Despite the challenges, Hyundai is moving forward with its LFP battery development project. The two-year project, initiated this year in collaboration with Korean battery manufacturers, aims to equip Hyundai and Kia's upcoming small and entry-level EVs, as well as medium-priced EVs, with LFP batteries starting from 2025.
Hyundai's goal is to maximize the battery cell's capacity to more than 60 amperes and achieve an energy density of around 300 watts per kilogram. By doing so, Hyundai aims to improve the voltage and capacity of LFP batteries to levels comparable to more expensive nickel, manganese, and cobalt (NCM) batteries.
Utilizing LFP batteries will enable Hyundai to offer more affordable EVs, which is crucial in a global market where EV prices have significantly dropped due to the EV price wars initiated by Tesla. This move also aligns with Hyundai's aim to reduce reliance on Chinese battery makers for building affordable EVs.
Currently, Hyundai relies on LFP batteries sourced from China's CATL for its Kona Electric and the Korea-exclusive Ray EV city car. However, Hyundai is looking to collaborate with not only large battery companies like LG Energy Solution, Samsung SDI, and SK On in Korea but also small battery makers to further its LFP battery development.
In June, Hyundai Motor Group announced plans to invest over $7 billion in EV battery development and related technologies over the next decade. CEO Jae-Hoon Chang stated that the company would work with battery makers and academic institutions to jointly develop LFP, NCM, and all-solid-state batteries.
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