Are LFP prices artificially high?

Substrate

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TL;DR - have you gone to the source to see if LFP manufacturing costs actually justify the price, nevermind performance or cost-per-cycle salesmanship?

Being an early adopter of LFP, I paid what I thought was "early adopter" prices. Prices didn't really fall much over intervening years as much a I thought they would. I thought that LFP would nearly wipe lead-acid off the map. Heh, not so.

The question that nobody seems to be asking is "How much does it actually cost manufacturers to make an LFP cell, in comparison to say lead acid?"

Note that I'm not talking about component installers, but questioning actual mining and fabricating costs that are sold to us. Do those costs actually justify the prices we are paying now? Or are we playing the cost-per-cycle and performance shell-game when it may be true that making an LFP battery could be pennies on the dollar?

I guess I'm just saddened by what I thought would be revolutionary in cost and performance (way beyond what it is now), given how cheap it is to manufacture, seemingly held artificially high based upon lead analogies of it's cost-per-cycle. The usual schtick..
 

Substrate

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Yep - no problem there. But that's the question about supply and demand, with a poor analogy:

Unless we're being generous, from a total business standpoint, should we be paying $1 per cup at the neighborhood lemonnade stand, when the initial product was made from flavored powder, water, and handed a dixie cup?

Sorry kids - not trying to be mean, this is just an outrageous example. :)

Maybe I'm being too obtuse - in my mind, we are still being held hostage to the lead-acid industry and it's pricing structure with comparisons that are artificially shoe-horned in.

Making a lead acid battery with it's special alloys, separators, and specialized manufacturing line techniques seems to cost way more than manufacturing a GOOD lfp battery.

Maybe it is the market of supply and demand. Maybe it's time to actually question it upstream?
 

45North

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What leverage do you have? Are you buying tons for a commercial account, or are you a normal consumer? Are you a senior gov official looking into trade practices?

If you need batteries then you have to choose from what's offered you.
Then by comparison shopping you find the best deal you can.
 

Substrate

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The leverage I have is that I can always fall back on my first love: Pure-Lead agm's, mostly because I know how not to kill them prematurely and get vaguely similar performance as LFP - albeit with a lot of proper maintenance know-how. Note that I mention the word vaguely. :)

So in reverse, I transitioned from pure-lead to LFP and was astounded at what engineering it takes to make a good pure-lead agm, vs slapping some hastily made LFP pouches inside a plastic box. These days I'm more a fan of LFP cylindrical, but I digress..

But I guess you are right in one aspect. If someone were to offer awesome quality LFP for $1 per Ah, that would be too disruptive, and one may have to go into some sort of protection program. :)

I dunno' - maybe all it takes is for end-users is to investigate how much it costs to actually manufacture an LFP battery, and push that question up the chain. System vendors could ask their suppliers the same to "show me the costs".

Kind of like how solar panel prices went from what - $10/watt when I first started to where they are now.

The first one who goes $1 / ah - with quality - wins the whole game. Might be too disruptive..
 

williamsk913

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There is a bit of a monopoly on the rare earth minerals used to make LiFePO4 batteries. The supply chain is cornered. Anytime a monopoly exists pricing reflects that.
 

Substrate

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You bring up a good question about lithium monopoly, but most research ties them in with other rare-earth minerals. One of them is cobalt, which we as LFP users don't have in our batteries. So we use mostly lithium and iron, and hopefully iron and iron phosphate are not in any monopoly position in the near future.

Ah, but Winston LFP's are doped with yttrium for improved cold-weather conditions, and that is a rare-earth element.

I'll do more research, but if LFP is going to start getting traded like petroleum, then maybe we ARE better off with recycleable lead. Not going there for now, but I can see a lead-acid salesman just freaking out with joy upon reading this thought. :)

Getting back to manufacturing LFP - batteries that is - in it's current form, would be benefitted from system vendors and such asking about actual plant manufacturing costs.

Glad you brought that near-monopoly issue up. I'll have to do more research if this is an actual factor, or perhaps a scare-tactic qualifier to keep any real artificial pricing levels going specifically related to LFP.
 

12VoltInstalls

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There’s a special branch of accounting dedicated to “costing” manufacturing. Sortofa hyper-advanced form of the food-costing a restaurant manager does that I learned early in my twenties. Which dovetailed perfectly with the NAHB estimating class I took.
While I’m no expert on manufacturing, I believe the market and media hype is supporting high lfp prices to some extent. In my shoot from the hip observation, however, I believe the profit margin is so attractive that no major player is going to discount when sales are brisk. Early in my twenties, for example, lumber and building supply margins were low. 10- 20% markups we’re about the limit for commodities. Today, depending on the item, 35 margins are not uncommon (that’s 50% markups, roughly) with some margins commonly pulling 50%(100%markup).

Retail expectations are driving most of the lfp pricing, imho, and manufacturer profit taking has expanded as well. Plus I’m not sure we can say lfp has ‘matured’ yet.

So in my opinion your question is valid.
The cost reductions usually provided by the “economy of scale” has not filtered down to the consumer/retail end with lithium batteries.
 

time2roll

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If you want the cells at cost you will need to build them yourself. Nobody goes into business to sell at cost.
Or need to wait until there is an oversupply. Currently there is a shortage of lithium batteries in the world.
Price is based on the most you can get, nothing to do with cost.
 

Substrate

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Yep. I'm just saying that I think it is artificially high. Witnessed LFP get introduced, (back when Calbs and Winstons were the cat's meow) and started making some inroads threatening lead, prices for LFP started to drop. But not for long.

Those on the ropes wanted to wait for it to drop further, but then marketing got hip to pushing amortized promised cycle-life as compared to lead instead, and the price never dropped significantly enough for global takeover.

Long way of saying that LFP pricing is based on lead-acid marketing and manufacturing costs, which is in itself more costly to manufacture than LFP is by itself.

Ie, nearly all LFP catalogues and so forth have the obligatory "as compared to lead acid" as their reference point in both performance and price, rather than stand on their own.
 
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Bob B

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I think it's just simple supply and demand.

If they were making more of them than they could sell .... the price would go down.
 

curiouscarbon

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there were recent new released reports of unidentifiable wiggling objects... 🤔and shipments are slow, hm…

the truth is out there
 

Substrate

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Mystery solved!

Dana Sculley just called to warn me that Fox Mulder had already been down this road before with alien electrolyte - discovering that the actual cost of LFP production was 1/4 that of lead!

However, at that realistic price point, world supply was easily outstripped, and yes, supply and demand took over once again. :)

It's for this reason that Mulder now only uses lead acid, and is honing his skills keeping AGM's alive.
 

12VoltInstalls

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I’m betting lfp will be continuing stable-ish in dollars over the next two years which makes them significantly cheaper down the road after figuring for inflation.
 
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