The \u00a0German-American physicist\u00a0 John Bannister Goodenough patented the technology that enabled the production of lithium iron phosphate batteries (known as LFP for its English nomenclature) in 1997. In 2019, at the age of 97, he was awarded the \u00a0Nobel Prize in Chemistry\u00a0 for his contributions to the development of \u00a0lithium-ion batteries\u00a0. However, Goodenough made a critical error; he failed to transition his innovation into the American industry, resulting in a minimal impact in the Western world.<\/p>\n
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Wang Chuanfu, the founder of the Chinese company \u00a0BYD\u00a0, did not make the same mistake. In 2002, he recognized the potential of Goodenough’s technology and instructed his research and development (R&D) team to explore LFP batteries’ capabilities to reduce China’s \u00a0dependence on nickel and cobalt\u00a0. This decision led BYD to share the current leadership position in the battery production industry with \u00a0CATL\u00a0. In fact, in 2008, BYD launched the first car equipped with an LFP battery.<\/p>\n
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China has become the \u00a0largest electric vehicle market\u00a0 globally. By 2025, it will sell more electric cars than combustion engine vehicles, partly due to government subsidies. Additionally, China is the \u00a0largest exporter\u00a0 of electric vehicles. In 2023, the nation exported approximately 1.7 million electric vehicles<\/a>, which accounts for over \u00a030% of its total automobile exports\u00a0.<\/p>\n <\/p>\n However, its international expansion faces significant challenges due to tariffs imposed by the \u00a0United States\u00a0 and the \u00a0European Union\u00a0, among other regions that struggle to compete with Chinese electric vehicles. Moreover, as previously mentioned, \u00a0China also leads\u00a0 the world in the production of lithium batteries. In the realm of electric vehicles, the country under Xi Jinping produces \u00a057% of the batteries\u00a0 used by these vehicles. \u00a0CATL\u00a0 and \u00a0BYD\u00a0 are the largest lithium battery manufacturers in the world, holding a market share of \u00a037.9%\u00a0 and \u00a017.2%\u00a0 respectively, according to the consultancy SNE Research<\/a>.<\/p>\n <\/p>\n In 2017, for the first time, the market share of NCM batteries surpassed that of LFP in electric vehicles.<\/p>\n<\/p><\/div>\n<\/div>\n China has achieved this leadership position due to several factors. Firstly, it is the \u00a0largest producer\u00a0 of lithium and rare earth materials, which are the primary raw materials used in battery manufacturing. Additionally, it controls the processing of these materials and can produce batteries on a large scale at highly competitive prices. However, there is another crucial ingredient in this recipe: \u00a0BYD\u00a0 and \u00a0CATL\u00a0 lead the global battery industry due to their capability for \u00a0innovation and adaptation\u00a0.<\/p>\n <\/p>\n In 2017, Chinese government subsidies prioritized the development of \u00a0nickel batteries\u00a0 with higher energy density, causing many Chinese battery manufacturers to invest in NCM technology. These lithium-ion batteries use a cathode made of nickel (Ni), cobalt (Co), and manganese (Mn), hence their name. \u00a0BYD fell behind\u00a0 during this period. In fact, for the first time in 2017, the market share of NCM batteries surpassed that of LFP batteries in electric vehicles, and by 2019, NCM batteries dominated the market.<\/p>\n <\/p>\n However, BYD did not give up. Wang Chuanfu believed that safety and thermal stability of batteries were paramount, leading to the launch of a new R&D project that culminated in the development of \u00a0Blade batteries\u00a0. These devices are thinner, have a modular structure, and can be easily integrated into electric vehicle chassis. This gamble paid off for BYD. By the end of 2020, BYD and CATL together controlled 66% of the Chinese LFP battery market<\/a> for electric vehicles, up from a mere \u00a06%\u00a0 in 2019. This represents the true strength of the two leading Chinese companies in the global battery industry.<\/p>\n <\/p>\n Image | BYD<\/a><\/p>\n