Material costs for LFP (lithium iron phosphate) batteries have been rising amid strong demand for them, according to China-based media reports.

Material costs for LFP batteries have risen by about 50% since the beginning of 2021 and are likely to further rise, the reports said. But material costs for ternary batteries has increased less during the period, and has shown a tendency to decline recently, the reports said.

Ternary batteries had dominated the electric vehicles (EV) market before Tesla adopted LFP batteries for Model 3 produced in China in second-half 2020, the reports indicated. As more EV vendors use LFP batteries, which are also increasingly used in energy storage systems, global demand for LFP batteries has quickly increased, the reports said.

China-based Contemporary Amperex Technology, BYD and Gotion High-Tech are globally leading makers of LFP batteries and their production capacities have been booked up by EV vendors, the reports said.