The Survival Paradox of "Expansion and Exit" of Lithium Iron Phosphate batteries

The lithium iron phosphate battery industry is currently facing a peculiar survival paradox: although leading lithium iron phosphate battery manufacturers such as CATL and BYD are rapidly expanding their production, they have received large supply orders of tens of billions of tons of lithium iron phosphate from companies such as Wanrun New Energy and Longpan Technology (such as CATL and Fulin Jinggong signing a 500 million advance payment agreement to expand their production capacity by 360000 tons of lithium iron phosphate), and are accelerating the production of high-voltage real lithium iron phosphate batteries due to the surge in demand for high-capacity energy storage batteries to cope with the market dividends brought by technological iteration; However, at the same time, some lithium iron phosphate battery companies have just completed production capacity and have quietly withdrawn. This phenomenon is due to multiple pressures: the production capacity of the lithium iron phosphate battery industry has reached 5.29 million tons, far exceeding the expected demand of 3.18 million tons by 2025, causing prices to plummet from 170000 yuan per ton to below 40000 yuan, compressing profit margins and forcing second - and third tier lithium iron phosphate battery manufacturers to exit at a loss due to cost disadvantages; In addition, the replacement of sodium ion batteries and the upgrading of internal high-voltage lithium iron phosphate battery technology have intensified competition, making it difficult for small and medium-sized lithium iron phosphate battery enterprises to keep up with the pace of iteration. The future of lithium iron phosphate batteries will be dominated by enterprises with technology, scale, and low-cost control, while blindly expanding lithium iron phosphate battery manufacturers will face higher elimination risks. The market is accelerating the transition to rational competition, and the lithium iron phosphate battery industry is ushering in a new round of reshuffle.