China’s monopoly, so enticing that even Elon Musk desires to make use of it for two/three of Tesla automobiles globally

VinFast Manufacturing and Buying and selling Co., Ltd. and Gotion Excessive-Tech Firm (China) have simply signed a Memorandum of Understanding (MOU) with a deal with the venture of supplying LFP batteries and learning the plan to construct a Giga Manufacturing unit. export the primary LFP battery cell in Vietnam.

In response to Vingroup, LFP (Lithium Iron Phosphate) batteries “are presently the preferred battery know-how within the international electrical automobile market, with excellent factors in security, lengthy life, not utilizing uncommon supplies in provide. restricted or should be exploited in unsafe situations of labor security, inflicting environmental impacts corresponding to Co-ban, Man-gan… Particularly, LFP batteries have aggressive prices, serving to to scale back product prices and scale back prices. appropriate for small/medium sized electrical automobiles”.

Opponents of LFP batteries are NMC batteries (Lithium Nickel Manganese Cobalt Oxide) or NCA batteries (Nickel Cobalt Aluminum)… with totally different supplies and elements.

The largest attraction of LFP batteries is their independence from extraordinarily scarce and risky uncooked supplies corresponding to cobalt and nickel. Cobalt is principally mined within the Congo, the place labor situations are low. Regardless of the decrease energy density, LFP batteries are less expensive. This might assist speed up the shift to electrical automobiles as a result of decrease manufacturing prices per automobile.

LFP battery technology that VinFast is aiming for: China's monopoly, so attractive that even Elon Musk wants to use it for 2/3 of Tesla cars globally - Photo 1.

Evaluate the indications of LFP batteries with different battery fashions (Supply: Tesla)

The truth is, LFP is sort of solely made in China. The rationale China dominates within the manufacturing of this battery is partly associated to LFP’s key patents, that are managed by a consortium of universities and analysis establishments. The group reached an settlement with Chinese language battery producers a decade in the past underneath which producers wouldn’t be charged licensing charges so long as the LFP was used solely in home markets.

China’s largest LFP battery producers embody BYD and CATL, two corporations that manufacture Tesla automobile LFP batteries which can be manufactured and bought within the nation.

LFP battery technology that VinFast is aiming for: Exclusive in China, so attractive that even Elon Musk wants to use it for 2/3 of Tesla cars globally - Photo 2.

The world’s largest electrical automobile battery producers (first eight months of 2020 statistics)

Gotion Excessive – Tech, the approaching associate of VinFast can be a reputation on the planet’s main group of electrical automobile batteries. Final Could, German carmaker Volkswagen turned Gotion’s largest shareholder, holding a 26.5% stake.

In response to business analysts, the LFP patent will expire in 2022. This may occasionally assist battery producers exterior China like VinFast to use this battery formulation. The beginning supplies moreover lithium iron and phosphoric acid are comparatively cheap and available.

The pattern that’s rising even with Tesla is that batteries made out of iron might be used primarily for widespread and cheaper automobiles, whereas batteries made out of nickel might be used for prime efficiency and high-performance automobiles. extra degree.

As well as, automakers have additionally made strikes to regulate battery provide by vertical manufacturing or joint ventures with established battery corporations. Due to this fact, it’s inevitable that LFP batteries are more and more widespread exterior of China.

LFP battery technology that VinFast is aiming for: Exclusive of China, so attractive that even Elon Musk wants to use it for 2/3 of Tesla cars globally - Photo 3.

Forecast of the market share of electrical automobile batteries sooner or later (Supply: Wooden Mackenzie)

In an announcement in July, Tesla CEO Elon Musk expressed an optimistic imaginative and prescient for batteries made out of iron. He talked about a major long-term change to the LFP battery line, whereby Tesla might use two-thirds of the batteries primarily based on iron and the opposite third primarily based on nickel.

“That is actually good as a result of there’s numerous iron on the planet,” mentioned Elon Musk.

Going again to VinFast, the Vietnamese firm can be following the worldwide pattern, together with transferring to extra LFP batteries. Notably, VinFast desires to construct an LFP battery manufacturing facility proper in Vietnam to determine a clear vitality ecosystem, localizing the availability.

Thai Thi Thanh Hai – Vice President of Vingroup shared: “Cooperating with Gotion Excessive-Tech – the world’s main prestigious battery producer is considered one of VinFast’s necessary motion plans in creating good electrical automobiles and provide chain autonomy.Our widespread aim is to determine a clear vitality ecosystem, scale back carbon emissions in Vietnam and contribute to this nice aim in different markets. market on the planet during which VinFast participates in enterprise actions”.

Beforehand, Vingroup established VinES Vitality Options Joint Inventory Firm with a capital of VND 1,000 billion to develop options and produce vitality batteries for electrical automobiles.

In response to Dong A