LFP Became The Dominant EV Battery Chemistry In 2025

The deployment of low cost lithium iron phosphate (LFP) batteries overtook traditional nickel based chemistries in electric vehicles for the first time in 2025, according to EV Magazine, citing data from research firm RhoMotion. The milestone marks a major inflection point for the global battery industry and underscores China’s growing dominance in EV battery technology.

For years, automakers relied heavily on nickel manganese cobalt (NMC) batteries, largely because of their higher energy density and a well established supply chain that supported long driving ranges. Most EVs sold in the U.S. still use NMC chemistry. However, those advantages come with significant tradeoffs. Nickel and cobalt are expensive to mine, environmentally intensive, and tied to controversial supply chains, particularly in the Democratic Republic of Congo, where labor and human rights concerns remain persistent.

As a result, battery manufacturers have accelerated a shift toward nickel free chemistries such as LFP. Chinese automakers and battery suppliers have led that transition, driven by LFP’s lower costs, reduced reliance on problematic materials, and a steadily shrinking energy density gap with NMC batteries. By last year, LFP packs accounted for more than half of global EV battery deployments, according to RhoMotion.

While NMC batteries still offer higher energy density, automakers have increasingly offset that disadvantage through engineering solutions. Cell to pack and cell to chassis designs allow more cells to fit within the same footprint, while improvements to anode and cathode materials continue to narrow the performance gap.

China’s dominance in LFP adoption is overwhelming. Between January and November of last year, more than 80 percent of EVs sold in China used LFP batteries, and that leadership is increasingly extending beyond its borders. Europe and Asia outside of China accounted for roughly 75 percent of global LFP growth in 2025, driven largely by rising exports from Chinese automakers. In Europe, Chinese brands captured a record 12.8 percent EV market share in November, more than doubling year over year. BYD, Leapmotor, and Chery all posted strong regional growth. CATL remains the clear global leader in LFP production, supplying battery cells for roughly one third of all EVs sold worldwide last year.

Chinese battery manufacturers are also expanding local production in Europe to reduce tariff exposure and stay close to automakers. Both BYD and CATL are building battery plants in Hungary, while CATL already operates a facility in Germany and has another planned in Spain with Stellantis.

North America was the only region where LFP deployments declined in 2025. U.S. tariffs and strict sourcing requirements under the Inflation Reduction Act have effectively blocked China made batteries, leaving few LFP equipped EVs on the market. Tesla briefly offered LFP batteries on the base Model 3 before discontinuing the trim in 2024. Rivian and Ford continue to use LFP packs on base versions of the R1S, R1T, and Mustang Mach E.

LFP is expected to rebound in the U.S., driven by lower cost EVs such as the new Chevrolet Bolt and Ford’s upcoming $30,000 electric truck. Longer term growth, however, is likely to be led by domestic production for battery energy storage systems rather than passenger vehicles alone, as U.S. manufacturers increasingly pivot capacity toward the rapidly expanding grid storage market.

EVinfo.net’s Take: The USA Must Increase LFP Battery Production, EV Production and EV Adoption

The United States is at a pivotal moment in the global transition to electric transportation. While electric vehicle adoption continues to grow, the pace and structure of that growth matter. To remain competitive, strengthen energy security, and meet climate and industrial policy goals, the U.S. must accelerate domestic lithium iron phosphate (LFP) battery production, expand EV manufacturing, and drive broader consumer adoption. These three priorities are deeply interconnected, and progress in one depends on progress in the others.

LFP batteries are emerging as one of the most important technologies for the next phase of electrification. Compared with nickel based chemistries, LFP batteries are significantly cheaper to produce, rely on more abundant raw materials, and avoid cobalt and nickel supply chains that are costly, geopolitically sensitive, and often associated with environmental and labor concerns. While LFP cells offer slightly lower energy density, advances in vehicle and battery pack design have largely offset that disadvantage for mainstream vehicles. For most drivers, the difference is no longer meaningful. Expanding domestic LFP production would give U.S. automakers access to lower cost batteries while reducing reliance on foreign suppliers, particularly China, which currently dominates global LFP manufacturing.

Increasing EV production in the U.S. is equally critical. Domestic manufacturing supports jobs, strengthens supply chains, and ensures that American automakers remain competitive as global markets shift toward electrification. Today, many affordable EVs rely on imported components, which exposes manufacturers to tariffs, policy risk, and supply disruptions. Scaling U.S. based battery and EV production would enable automakers to build lower cost vehicles that qualify for domestic content incentives, improving margins while offering consumers more affordable options. Without sufficient local production, the U.S. risks falling behind as Europe and China continue to scale faster and more efficiently.

EV adoption is the third and most visible piece of the equation. Mass adoption will not occur through incentives alone. It depends on vehicles that are affordable, practical, and easy to live with. Lower cost LFP batteries directly support this goal by enabling EVs with competitive pricing and solid real world range. As more affordable models reach the market, adoption accelerates, which in turn justifies further investment in factories, supply chains, and charging infrastructure. This creates a reinforcing cycle of scale, cost reduction, and consumer acceptance.

There is also a national security and energy resilience dimension. Expanding EV and battery production reduces exposure to volatile global oil markets and strengthens the domestic energy economy. LFP batteries play a dual role here, supporting both electric vehicles and large scale energy storage systems that stabilize the power grid and integrate renewable energy. A robust domestic LFP industry would give the U.S. greater control over critical energy infrastructure.

If the U.S. fails to move faster, the consequences are clear. China will continue to dominate low cost EVs and battery exports, Europe will capture advanced manufacturing investment, and American consumers will face fewer choices at higher prices. By contrast, a coordinated push to expand LFP battery production, scale EV manufacturing, and accelerate adoption would position the U.S. as a global leader in the next phase of clean transportation.

Increasing LFP battery production in the US would create badly needed jobs. 2025 was the worst year for hiring since 2020, a December jobs report shows.

The opportunity is still within reach, but the window is narrowing. The countries that control battery supply chains and EV production today will define the automotive and energy industries for decades to come.