Current EV battery chemistry maintains lead as research on improved formulations continues

The nickel-rich lithium ion batteries that power most electric vehicles will likely remain the battery chemistry leader for years.

More than 90 percent of EVs in the U.S. have lithium ion batteries with some combination of nickel, manganese, cobalt and aluminum, according to Boston Consulting Group.

"Nickel-based lithium ion batteries will continue to be the majority solution into the next decade, if not well into the next decade," said Nathan Niese, global lead for electric vehicles and energy storage at the firm.

But variations of a less common chemistry — lithium, iron and phosphate — could make up a third of the market by 2030, surging from less than 10 percent today, the group said.

Lithium iron phosphate batteries have emerged as a lower-cost, shorter-range option compared with nickel manganese cobalt cells. Still, limited energy density has kept them out of most EVs.

BYD and CATL make lithium iron phosphate batteries in China. U.S. startup Our Next Energy in Michigan plans to make them for passenger vehicles and battery storage systems.

Lithium iron phosphate cells cost less than nickel cobalt manganese chemistries, and they have a longer lifespan. They also have less energy density, which translates to a shorter driving range but reduces fire concerns, Niese said.

They perform worse than nickel cobalt manganese combinations in cold temperatures and are more difficult to recycle, he said.

Their long lifespans make them candidates for battery storage systems, said Reeja Jayan, associate professor of mechanical engineering at Carnegie Mellon University.

Lithium iron phosphate "is really a highly desired chemistry for something like the grid," she said. "You want these grid batteries to just sit there and last for decades, charging [and] discharging thousands of times."

Lithium iron phosphate batteries are also popular internationally for electric scooters and three-wheelers that travel short routes, she said.

"In the U.S., everybody drives long distances, has a large car. LFP alone will not cut it," Jayan said.

While automakers and battery suppliers develop and localize lithium iron phosphate cell production, some are also improving the predominant battery chemistry.

For example, LG Energy Solution is adding aluminum and reducing cobalt, which is expensive and difficult to source, Niese said. The South Korean company's customers include General Motors, Toyota Motor Corp., Tesla and others.

The chemistry has "some of the highest energy density you're going to find on the market today for the affordable price that would work for an automotive context," Niese said. "Relative to an LFP battery … [nickel manganese cobalt] will have shorter lifespans. They will be more expensive."

Nickel and cobalt also have more recycling value than iron and phosphate, he said.

Some companies are combining elements by adding manganese to lithium iron phosphate chemistries.

If successful, that mix could drive cells in the lithium iron phosphate family to a third of the market, as Boston Consulting Group forecasts, Niese said.

The evolving chemistry might solve the individual problems of lithium iron phosphate and nickel manganese cobalt cells, Jayan said.

"You don't just want to have EVs that drive a long distance," Jayan said.

"You want them to be stable and safe."