EV's cathode materials see explosive growth, est 2.15 million ton-demand by 2025

The demand for cathode materials used in electric vehicle batteries has increased sharply, according to TrendForce's estimates, largely due to the explosion of new energy vehicle production and sales.

As the most demanded type of raw material for EV batteries, the shipments of cathode materials benefited from the rapid growth of new energy vehicles. It is estimated that the global demand for cathode materials will reach 600,000 tons in 2021, and it is expected to exceed 2.15 million tons by 2025.

EVs are the largest downstream application market for lithium batteries, and their consumption accounts for more than 60% of the total lithium battery consumption. It is estimated that the total lithium battery consumption of electric vehicles worldwide this year will reach 310GWh, and the corresponding demand for cathode materials will reach about 604,000 tons.

According to statistics from the China Association of Automobile Manufacturers, China's new energy vehicle sales reached 2.99 million in the first November of this year, accounting for about 50% of the global total sales of new energy vehicles, becoming the key to boosting global demand for power battery installations. As of November this year, the installed capacity of power batteries in the Chinese market reached 128.3GWh, an annual growth rate of 153.1%. Among them, the installed capacity of lithium iron phosphate batteries reached 64.8GWh, surpassing the installed capacity of ternary batteries by 63.3GWh for the first time.

TrendForce believes that benefiting from the strong market demand in the electric vehicle market, lithium battery material manufacturers represented by cathode materials have started a large-scale expansion wave this year. It is expected to gradually release new production capacity in the next 2 to 3 years to ease the tight market demand.

At present, the overall capacity utilization rate of China's cathode material industry is not high. With lithium iron phosphate materials as an example, the capacity utilization rate of China's lithium iron phosphate cathode materials in 2020 is about 44%, expected to rise to 56% this year. In the future, facing the global market demand of more than 2 million tons, whether the current circumstances will hold on depends on whether the new production capacity of cathode materials can be put into production on schedule and whether the supply of its key raw material lithium carbonate is sufficient.