Lithium-iron phosphate is now the most widely deployed EV battery chemistry in the world. Thank China's dominance in the space.
The Chemistry Shift
LFP was the fastest growing battery chemistry in 2025, with demand increasing 48%, according to research firm RhoMotion. It has overtaken nickel-based packs to become the dominant battery chemistry in the world. China spearheaded this growth, followed by Europe and some Asian countries.
The rollout of low-cost lithium-iron phosphate (LFP) batteries surpassed deployments of traditional nickel-based chemistries in electric vehicles in 2025 for the very first time, EV Magazine reported, citing RhoMotion data. This marks a significant shift for the global battery industry and signals China's continued dominance.
From NMC to LFP
For years, automakers leaned heavily on nickel-manganese-cobalt (NMC) batteries, largely because they benefited from a mature supply chain and higher energy density that delivered desirable driving range on EVs. Most U.S.-market EVs use NMC batteries.
But those advantages have come at a cost. Nickel- and cobalt-heavy batteries are expensive to mine, environmentally intensive and remain tied to controversial supply chains involving labor and human rights violations, particularly in the Democratic Republic of Congo.
As a result, battery makers have been accelerating their shift toward nickel-free chemistries such as LFP.
China Leads the Transition
Chinese automakers and battery companies have been leading the shift, thanks to LFP's lower costs, reduced dependence on troubled materials and a narrowing energy-density gap with NMC batteries.
By 2025, LFP batteries accounted for more than half of global EV battery deployments, RhoMotion said. NMC batteries still retain an edge on energy density, but automakers have found ways to offset that disadvantage.
Cell-to-pack and cell-to-chassis designs allow more cells to be squeezed into similar spaces. Optimized anode and cathode materials are helping close that performance gap even further.
China's Domestic Dominance
China is absolutely crushing it when it comes to LFP adoption. Between January and November 2025, more than 80% of EVs sold in the country were equipped with LFP batteries. And that dominance is also spilling overseas.
European and Asian Expansion
Europe and Asia (excluding China) accounted for roughly 75% of 2025's global LFP growth, driven largely by a surge of Chinese EVs entering overseas markets.
In Europe, Chinese automakers accounted for a record 12.8% of the EV market in November, more than doubling their share from a year earlier, Bloomberg reported, citing Dataforce numbers. BYD, Leapmotor and Chery all posted strong growth across the region in 2025.
CATL's Market Leadership
China's CATL is by far the leading company in the LFP market, and in 2025, about one-third of all EVs sold had CATL battery cells.
Chinese battery giants are pushing aggressively into local LFP production in Europe, both to reduce their exposure to tariffs and to stay close to automakers. Both BYD and CATL are building battery factories in Hungary. CATL already operates a plant in Germany and has another one planned in Spain in partnership with Stellantis.
North America: The Exception
North America was the only region to see LFP deployments decline in 2025. The U.S. has effectively blocked China-made batteries from entering the country through tariffs and strict sourcing rules under the Biden-era Inflation Reduction Act, leaving only a handful of LFP-equipped EVs on the U.S. market.
Tesla briefly offered LFP batteries on the base Model 3 in the U.S., but discontinued that trim in 2024 due to tariffs. Rivian and Ford still use LFP packs on base versions of the R1S, R1T and Mustang Mach-E.
However, LFP is expected to undergo somewhat of a resurgence in the U.S. thanks to more affordable EVs like the new Chevrolet Bolt and Ford's upcoming $30,000 electric truck.
The U.S. Path Forward
LFP is still poised to grow in the U.S., but the path will look different from what's happening in Europe and China. Much of that momentum is expected to come from domestic production of battery energy storage systems (BESS), rather than passenger EVs alone.
After the end of the $7,500 federal tax credit, several battery makers in the U.S., including LG Energy Solution, Tesla and SK On, adjusted their battery manufacturing capacity for the ESS market, which is growing much faster than EVs.
Key Advantages Driving LFP Adoption
Cost competitiveness: Lower material costs compared to nickel-cobalt batteries make LFP attractive for mass-market vehicles.
Supply chain ethics: Avoiding cobalt eliminates exposure to controversial mining operations in Congo.
Safety profile: LFP batteries demonstrate superior thermal stability, reducing fire risk.
Cycle life: Longer lifespan makes LFP particularly suitable for commercial vehicles and energy storage.
Manufacturing scale: China's established production capacity enables rapid deployment.
Technical Improvements Closing the Gap
The traditional disadvantage of LFP—lower energy density compared to NMC—is becoming less significant through several innovations:
Structural battery designs: Cell-to-pack and cell-to-chassis configurations maximize space utilization.
Material optimization: Advanced cathode and anode formulations improve energy storage.
Thermal management: Better cooling systems allow cells to operate at peak efficiency.
Pack-level engineering: Sophisticated battery management systems extract maximum performance.
Market Implications
The LFP transition represents more than a technical shift—it's reshaping global battery supply chains and competitive dynamics.
China's leadership in LFP production gives it enormous leverage in the global EV market. European automakers increasingly depend on Chinese battery suppliers, while U.S. manufacturers face difficult choices between cost competitiveness and domestic production requirements.
For consumers, LFP's rise could mean more affordable EVs with acceptable range, particularly in the $25,000–$40,000 price segment that remains underdeveloped in many markets.
The Road Ahead
LFP's dominance in 2025 likely represents the beginning, not the end, of this chemistry's growth trajectory. As energy density continues improving and costs decline further, LFP may extend into vehicle segments currently dominated by high-nickel batteries.
The main question is whether non-Chinese manufacturers can establish competitive LFP production capabilities or whether China's first-mover advantage proves insurmountable. For now, the data shows clear Chinese leadership in this critical battery technology.
