L(M)FP batteries for EV adoption from a UK perspective

Introduction:

2024 was a record year for the sales of electric vehicles (EVs) across the world with a total of 17 million vehicles sold. In the UK, EV sales grew to 20% of the overall car sales market. However, in the EU and EEA market it ended up down 3% compared to 2023.

As we journey through 2025, the environment remains a challenging time for the European and UK

markets as more stringent EU emission standards and the UK’s zero-emissions sales mandates are on the horizon. Global original equipment manufacturers (OEMs) are facing the sustained twin challenge of needing to invest in transitioning their fleets to electrified models and facing headwinds through slowing consumer demand, affecting their profit margins and cash flow.

To maintain a healthy cash flow and operating margin, OEMs must reduce the cost of EV production where battery packs account for a large part of the cost – up to 40%. The cost consists of manufacturing key cell components like the cathode and anode, as well as the assembly of the cell through packaging with separators and electrolytes. The cathode material determines the energy density, is a key factor in battery capacity, and can be up to one-third of the cell cost.

The Cathode Active Material (CAM) could be made of lithium hydroxide / carbonate and be combined with energy-rich materials like nickel, manganese or cobalt. Managing the cost of CAM materials is important to keep control of the overall battery production cost. There has been a proliferation of battery chemistries trialed and adopted across the world in automotive applications in response to consumer requirements. Battery chemistries that are low cost in CAM manufacturing are becoming more prevalent globally when compared to energy rich nickel and cobalt-based battery cells and this boosts overall efficiency for the scale-up needed for mass-EV production.

This report focuses on one such battery chemistry, LFP (Lithium Iron Phosphate) and provides an overview of its technology and supply chain competitiveness for increasing EV adoption in the region of the UK and Europe.