3) IP rights kept LFP confined to the Chinese market; this will change after 2022
LFP cathode producers explained to Roskill that the consortium managing LFP’s IP rights reached an agreement with the Chinese battery industry a decade ago in which, as long as LFP was produced and used within China, the consortium would not charge Chinese manufacturers a licensing fee. As a result, the price of Chinese LFP batteries has always been considerably lower than non-Chinese LFP batteries. However, the patents’ restrictions over LFP will start to expire in 2022. Simultaneously, the limitation of LFP exports on Chinese producers will be largely removed, along with the licensing fee for non-Chinese LFP cell producers. The removal of this IP barrier could become the largest opportunity for LFP-based Li-ion batteries to rapidly gain market share in the EV market outside China.
