US LFP Market
The overall lithium-ion battery market in the United States has experienced significant growth in recent years and is projected to continue to grow at a CAGR of 19%. The US LFP battery market is emerging as a major player in three end markets: Electric Vehicles (EVs), Energy Storage Solutions (ESS), and consumer electronics.​
LFP Market in USA
Energy Transition
The ongoing energy transition is driving demand for various products and technologies, including:
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EVs which are projected to reach 5.3 million units by 2030.
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ESS, with lithium-ion capacity expected to increase from 1.5 GW in 2020 to 7.8 GW in 2025.
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Consumer electronics, which are increasingly relying on efficient and reliable lithium-ion batteries.
Decreasing Battery Price
The cost of batteries has decreased significantly due to advances in battery technology, with prices reduced by 82% to $161/kWh since 2012. However, recent global events and supply chain disruptions have led to spikes in inflation.
As the electric vehicle (EV) market continues to grow, economies of scale are anticipated to further reduce costs, with battery prices projected to drop to $73/kWh by 2030.
US Government Incentives
The Li-ion battery market in the US is expected to benefit from recent government legislation, including the Infrastructure Investment and Jobs Act (IIJA) which allocates over $7B to develop the country's critical mineral resiliency, battery material processing, and battery manufacturing capabilities. Additionally, the Inflation Reduction Act (IRA) provides incentives for consumers and Electric Vehicle OEMs that meet domestically focused supply chain requirements. These tailwinds, combined with the decreasing cost of battery technology and economies of scale in the EV market, are expected to further boost the growth of the Li-ion battery market in the US.
LFP Production in USA
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With the evolving regulatory environment, international producers of LFP cathode materials are waiting for further information on the Inflation Reduction Act (IRA) before implementing plans to construct LFP facilities in the US. The global value chain is expected to undergo significant changes, but it will remain unclear how "foreign entities of concern" can participate in the US market in the near future until the IRA and other related legislation details are made available by the end of 2022 or early 2023.
