The global lithium iron phosphate battery market will grow at a compound annual rate of 13.7% in 2022-27

According to a report released by Markets and Markets, an international market research institution, the global lithium iron phosphate battery market is expected to grow from $13 billion in 2022 to $24.
6 billion in 2027, with a compound annual growth rate of 13.
7%
during the period.

The main driver of the lithium iron phosphate battery market is the growing demand for lithium iron phosphate batteries in the automotive industry, especially for electric vehicle applications
.

As industrial automation evolves, so do material handling equipment to support the changing needs of various industries, including the need for fast and efficient battery-powered equipment such as AGVs and electric forklifts in industries such as warehouses, logistics, food and beverage, and healthcare
.

According to a report published by the International Federation of Robotics, there are about 2.
7 million industrial robots operating
in factories worldwide.
Thus, the demand for battery-powered material handling equipment is driving the growth
of the lithium iron phosphate battery market.

R&D initiatives undertaken by battery manufacturers to develop lithium iron phosphate batteries and increase their battery production capacity have increased
significantly.
For example, among the world's leading LFP manufacturers, CATL was equipped with about 200GWh of battery capacity in 2021 and plans to increase the capacity to about 500 GWh
by 2025.

Moreover, due to the increasing application of lithium iron phosphate batteries, it is also witnessing the expansion of market players and investments in facility development to accommodate potential demand growth
.
For example, American Battery Factory (ABF), a small and medium-sized enterprise in the United States, has established a network
of LFP battery gigafactories in the United States.

Compared to other lithium-ion batteries, lithium iron phosphate batteries have a lower
energy density.
In the current situation, a key consideration is that the batteries used in electric vehicles should be small and lightweight
.
Therefore, batteries
with energy densities much higher than 300 Wh/kg and 800 Wh/L are used.

The automotive segment is expected to be the fastest growing market in the lithium iron phosphate battery market during the forecast period
.
Based on industry, the global market is segmented into automotive, power, industrial, aerospace, marine, and others
.
The high growth rate in the automotive sector can be attributed to the growing demand for electric vehicles due to the transition
to clean energy adoption in various economies around the world.

The Asia-Pacific region is expected to be the largest regional market for the lithium iron phosphate battery market, followed by Europe
.
Asia Pacific is also expected to be the fastest growing market
during the forecast period.
The growth of the lithium iron phosphate battery market in Asia Pacific is mainly driven
by the development of the automotive and power industries in economies such as China, Japan, India, and South Korea.

COVID-19 impact

As governments were forced to implement lockdown measures to prevent the spread of the virus, operations in various industries such as manufacturing, energy and power, automotive and IT were drastically and rapidly reduced
.
As of June 12, 2022, about 220 countries have been affected
by the pandemic.
This has led to a significant decline in transportation and related activities, which has a negative impact on the automotive industry, thereby affecting the demand
for lithium iron phosphate batteries.
Together, these events have had a significant impact on the entire value chain of various industries, thereby hampering the demand
for lithium iron phosphate batteries.