Estimating the tipping point for lithium iron phosphate batteries

Uncertainty surrounding NMC cathode chemistry prices have prompted increasing interest in less expensive alternative technologies. Chief among these is lithium iron phosphate (LFP), a chemistry that offers a cost advantage at the expense of energy density. We estimate which chemistry offers a lower cost at targeted vehicle ranges consistent with those consumers can expect from internal combustion engine vehicles. Our model – which considers tradeoffs between battery capacity and weight – enumerates a range ‘tipping point’ of 373.52 miles, beyond which NMC batteries consistently demonstrate a cost advantage over LFP batteries, despite the latter's reliance on less costly minerals. Using this tipping point as a benchmark, we leverage trip-level data from the National Household Travel Survey to explore which U.S. households may benefit from EVs equipped with LFP versus NMC batteries. Among multi-vehicle households, only 1 % of all trips taken exceed 160.53 miles, a figure analogous to our most conservative tipping point. To the extent that EVs may be utilized for relatively short commutes or as secondary or tertiary vehicles, our results suggest that LFP batteries can offer lower costs relative to NMC batteries while satisfying most households' travel demands. We subsequently discuss the policy implications of these findings. © 2024 Elsevier Ltd