Recent announcements hinting at potential restrictions on Lithium Iron Phosphate production technology have sent ripples through the industry. Here at Electrios, we’ve been closely involved with the Chinese LFP production industry for many years.

Simply put, it’s incredibly difficult to envision US or EU-based LFP production matching, let alone beating, Chinese production costs. Our models suggest that Western production costs could be more than double, even under the most optimistic scenarios. The key to China’s LFP success is Raw material integration. The entry of phosphate fertilizer and titanium dioxide producers into the LFP market has dramatically reshaped the competitive landscape. This vertical integration has led to the closure of some Pure-Play LFP producers and put immense pressure on those remaining.

To compete, the West needs to adopt a similar strategy. Integration by leading global phosphate producers like ICL Group and OCP Group is a strategically viable option towards achieving LFP production at Chinese cost levels.