General Motors (GM) plans to reduce the price of electric vehicles (EVs) in the United States by expanding the range of battery chemistries it uses to include lithium-iron phosphate (LFP), its vice president of batteries, Kurt Kelty, told an annual investor’s panel on Tuesday October 8.
The move will reduce GM’s reliance on nickel cobalt manganese (NCM) batteries and the use of LFP battery technology will reduce the cost of an EV by “as much as $6,000”, Kelty said.
In July, GM said it had suspended plans to build a third battery plant to produce NCM batteries due to slowing demand for EVs.
LFP batteries are safer and cheaper to produce than NCM batteries and, crucially, do not rely on cobalt, which is susceptible to massive price swings, Fastmarkets understands.
“Automakers and battery manufacturers have been trying to reduce the use of cobalt in batteries for years, to cut costs. In previous years, LFP batteries were mostly used in China [so] the announcement by General Motors marks the further expansion of LFP chemistry in the US after Ford [announced] plans to build a LFP factory in the country,” an industry analyst said.
In February 2023, US automaker Ford announced that it would be investing $3.5 billion to build an LFP plant in the northern US state of Michigan, which marked the chemistry’s first adoption in what is an NCM-dominated market.
And in September 2023, Chinese battery producer EVE Energy announced that it would establish an LFP battery manufacturing joint venture in the US with German automaker Daimler Truck and US firms Paccar and Electrified Power.
“Despite the growing trend of adopting LFP batteries, NCM batteries will continue to be the main option for EV makers in the next few years because LFP batteries have lower energy density and less driving range for equivalent-sized packs. Automakers are likely to continue to focus on reducing the proportion of cobalt in NCM batteries instead of widely using LFP batteries,” the industry analyst added.
GM still plans to build a battery research and development department at its Global Technical Center at Warren in Michigan, in 2027, to enable it to better compete with the Chinese battery manufacturers that currently dominate the global battery supply chain, Kelty said.
The company will also continue to collaborate with South Korean companies, it said, focusing on battery developments with LG and working with Samsung SDI to build a new EV battery plant in the northeastern state of Indiana.
