The competition over power battery technology continues to be intense. As of April 9, 2025, data reveals that the global market share of lithium iron phosphate (LFP) batteries has for the first time surpassed that of ternary lithium batteries, accounting for 49.9%. The advantages of LFP batteries in terms of safety and cost are becoming increasingly evident.
High-voltage LFP has emerged as a key force driving LFP’s continued market dominance, potentially leading to a reshuffling of the industry. With the ongoing demand for longer range and faster charging in the electric vehicle market, optimizing energy density has become a focal point of the industry. Conversely, ternary lithium batteries still hold competitive advantages in emerging applications such as embodied intelligent robots and eVTOL (electric vertical takeoff and landing) aircraft.
Looking ahead, the competition in power battery technology will expand into various dimensions, including material innovation and process optimization, profoundly influencing the future direction of the new energy industry.
Currently, the market share of domestic LFP batteries has surpassed 80%, while ternary lithium batteries continue to maintain a foothold in certain mid-to-high-end markets. According to the High-Tech Industry Research Institute (GGII), the share of LFP batteries in global installations significantly increased at the beginning of this year, with January and February seeing LFP batteries account for the first time for 49.9% of total global installations.
Furthermore, data from the China Automotive Power Battery Industry Innovation Alliance indicates that domestic power battery installations reached 34.9GWh in February, marking a year-on-year increase of 94.1%. Among these, the installation of ternary lithium batteries was 6.4GWh, representing 18.5% of the total, a decline of 7.2% year-on-year, while LFP battery installations reached 28.4GWh, making up 81.5% of the total, and showing a year-on-year growth of 158%.
As a core component of electric vehicles, the choice of battery technology directly impacts vehicle performance and market competition. Over the past decade, both ternary lithium and LFP batteries have experienced a long-standing market rivalry. Given the continuously evolving market demands, the competition between these two battery technologies is likely to remain tight. Ultimately, the direction of technological routes will depend on material innovation and shifts in market needs, particularly breakthroughs in key metrics like energy density and fast-charging technology, which could reshape the competitive landscape.
Currently, high-voltage LFP batteries are pivotal in enhancing energy density, becoming a crucial element in LFP’s ongoing market advancement, and potentially establishing competitive advantages for enterprises, thus further driving industry reshuffling.
Advantages of LFP Batteries
LFP and ternary lithium batteries each have their strengths and weaknesses. LFP batteries are known for their low cost, high reliability, and reduced fire risk, but they do have lower energy density. Before 2021, ternary lithium batteries dominated the market due to their high energy density and long range. However, as innovative technologies have emerged, this situation has rapidly changed, highlighting the advantages of LFP batteries in safety and cost. Many domestic and international automakers are now opting for LFP batteries, and several major lithium battery companies have begun to invest heavily in LFP battery production, resulting in LFP’s swift market gains.
As we approach 2025, LFP continues to capture new competitive heights. This year, major LFP manufacturers have seen a surge in orders, creating a strong upward pricing trend, especially for new generation high-voltage LFP products. According to Li Industry Analyst Jiang Jiahui from Shanghai Steel Union’s new energy division, the current LFP industry mainly utilizes phosphoric acid method or ferrous oxalate method to produce high-voltage LFP, which increases the active material content within the same volume, thereby enhancing the energy density and overall cost-effectiveness of the battery cells.
A representative from a lithium battery cathode material company confirmed the upward pricing trend for LFP, stating, “Currently, some leading manufacturers are inclined to raise prices. Some large companies are considering price increases for different LFP materials, but the specific increase may vary with each order.” Signs of LFP price increases have been evident for some time. In mid-January, Hunan Yunneng New Energy Battery Materials Co., Ltd. announced its negotiation efforts with clients regarding price adjustments, confirming agreements with some customers.
Chen Xingwen, Chief Strategy Officer of Zhuhai Heiqi Capital Investment Management, remarked, “The sustained growth in market demand and the booming electric vehicle market are driving up the demand for LFP batteries, which in turn boosts the sales of LFP cathode materials. Furthermore, the acceleration of product iteration towards high-voltage denser forms is a major factor driving price increases.” Currently, high-voltage LFP typically refers to LFP materials with a powder compacting density of over 2.6g/cm3, representing the fourth generation of LFP technology. Due to its higher compacting density and performance advantages, it holds stronger pricing power compared to standard products, with some companies already in mass production.
The aforementioned representative also mentioned that LFP has transitioned from primarily second-generation products to third-generation, with some leading companies already shipping fourth-generation products, enhancing their bargaining power. “Fourth-generation high-voltage LFP products can meet the market demands for high energy and fast charging, resulting in strong demand and tight supply, enabling leading companies to further consolidate their advantages through technological barriers,” noted a representative from a lithium battery company based in Guangdong.
Key Variables Reshaping the Competitive Landscape
Throughout the evolution of the power battery industry, each significant breakthrough in material technology has led to deep market restructuring. High-voltage LFP is not only a driving force behind price increases but also a battleground for new technological competition within the industry. In 2023, the release of the Shenxing Supercharge Battery by CATL propelled LFP battery technology to new heights. The subsequent launch of the Shenxing PLUS, which utilizes nanoscale precision arrangement to achieve high compacting density standards for the cathode material, successfully addresses three major industry pain points: range, fast charging, and safety. High-voltage LFP has quickly become a crucial variable in altering the competitive landscape of power batteries, even starting to challenge the high-end market of ternary batteries.
According to Mo Ke, Chief Analyst at Zhenli Research, “The current trend indicates that industry leaders are clearly poised to embark on a fierce arms race.” Battery companies are continually introducing new battery technologies that expand the market space for high-voltage LFP. For instance, CATL views the Shenxing battery series as a focal point for market promotion in 2025, aiming to capture half of its LFP battery shipments.
Battery material companies are also actively innovating. Hunan Yunneng has previously stated, “Our new high-voltage LFP product YN-9 series is primarily aimed at power battery applications. By improving particle size distribution technology, we have effectively increased the material’s compacting density while ensuring its capacity performance and rate capability.” According to a research report from Guojin Securities, the projected demand and supply for high-voltage LFP products in 2025 are 730,000 tons and 780,000 tons, respectively, indicating a tight overall supply-demand situation. This surge in high-voltage LFP demand is driven by the dual forces of the electric vehicle and energy storage markets. Particularly in the energy storage sector, projections indicate that global energy storage battery shipments will reach 356GWh in 2024, representing a year-on-year increase of 61.5%. The urgent market demand for fast-charging batteries and large-capacity cells positions high-voltage LFP technology as a significant trend.
In contrast to the heated demand side, the supply side appears somewhat constrained. Due to high technical barriers, only a few leading companies can master the critical technology of high-voltage LFP. Small and medium-sized enterprises still face numerous challenges in overcoming technical barriers. The breakthrough in high-voltage LFP technology has not only enhanced product performance but has also triggered a comprehensive restructuring of the supply-demand structure and pricing system in the power battery market. Between 2024 and 2025, this transformation will clearly manifest across various segments of the industrial chain—from raw material pricing to capacity allocation, from company profitability to market share, high-voltage products are becoming the key determinant of competitive outcomes in the industry.
The differentiation in technology has directly led to market fragmentation; enterprises capable of mass-producing high-voltage LFP are experiencing profitability, while those stuck with low-end products are ensnared in price wars. Jiang Jiahui believes this trend will accelerate industry clearing, with leading manufacturers enhancing their market share through technological advantages and large-scale orders, while less technologically equipped mid- and low-end manufacturers may be forced to exit. Simultaneously, the industry’s profit model will shift, moving from price wars to technological premiums. In the future, firms with technological reserves and integrated capabilities will dominate the market.
However, Mo Ke warns that while the future seems bright, it also harbors risks. “Although high-voltage LFP shows improved energy density over regular LFP, its potential remains limited compared to ternary materials, restricting its application in high-energy-density scenarios.”
The Evolution of the Two Major Technical Rivalries
The rise of high-voltage LFP technology is not the endpoint, but rather the beginning of a new round of technological competition within the power battery industry. As two mainstream technological routes in the electric vehicle sector, the market rivalry between LFP and ternary lithium batteries remains ongoing. Initially, ternary lithium batteries maintained a leading market share, but this dominance was short-lived as innovations such as blade batteries and CTP packaging technology emerged, steadily increasing the market share of LFP batteries.
In 2020, BYD Company Limited launched blade batteries, which improved the volume utilization of traditional LFP battery packs by over 50%, significantly boosting energy density. Additionally, breakthroughs in various technologies have enhanced the range of LFP batteries to levels comparable to ternary lithium batteries. Mo Ke notes, “As the demand for range and charging efficiency in electric vehicles continues to grow, optimizing energy density has become a focal point of the industry, leading to widespread recognition of high-voltage LFP technology as a new competitive point.”
Despite the rapid advancements of LFP batteries, ternary lithium batteries still have opportunities for counterattacks, especially given the market and application scenario characteristics. Currently, battery manufacturers from Japan and South Korea remain optimistic about ternary lithium batteries, which continue to be the preferred choice for many high-end electric vehicles in China. For example, the new Wanjie M9 model is equipped with a ternary lithium battery from CATL. Moreover, solid-state batteries are widely recognized as the “ultimate form” of next-generation power batteries, utilizing high-nickel ternary materials for their cathodes. Ouyang Minggao, an academician of the Chinese Academy of Sciences, predicts that “the industrialization of solid-state batteries will commence between 2027 and 2028, with full mass production achievable by 2030.” This technological breakthrough could again alter the competitive landscape between ternary lithium and LFP batteries.
Importantly, the rapid expansion of two trillion-yuan markets, embodied intelligent robots and eVTOL, provides a substantial growth opportunity for ternary lithium batteries. The battery requirements in these fields are stringent: they must be lightweight, offer sufficient range, and ensure safety. Thanks to their high energy density and long endurance, ternary lithium batteries have become the preferred power source for these sectors. Emerging applications tend to be less price-sensitive but demand high performance, potentially heralding a “second spring” for ternary lithium batteries. According to estimates from High-Tech Industry Research Institute, if each embodied intelligent robot is equipped with an average of 2kWh of battery capacity, the global shipments of lithium batteries for embodied intelligent robots will reach 2.2GWh by 2025, with demand expected to exceed 100GWh by 2030.
It is clear that the expansion of new application scenarios has ushered the competition between ternary lithium and LFP battery technologies into a new phase. Future competition will no longer be limited to a single performance metric but will extend to comprehensive battles involving material innovation and process optimization across multiple dimensions. Looking towards 2025, advancements in material innovation, process upgrades, and application expansions will continue to push the boundaries of power battery technology, resulting in profound transformations within the industry ecosystem. As Mo Ke aptly states, LFP’s journey from market marginalization to resurgence and continued breakthroughs demonstrates that there are no eternal technological advantages; only continuous innovation can ensure survival. “In the future, this competition will be a crucial technological contest, and its outcomes will deeply influence the future direction of the new energy industry.”
