According to China Industry News, the lithium iron phosphate market has been bustling since the third quarter, with order backlogs becoming both a blessing and a headache for many leading manufacturers.
Recently, a listed company specializing in LFP business disclosed during an investor briefing that its lithium battery cathode material sales surged significantly year-on-year in Q3, with market competitiveness continuously strengthening. Its LFP business achieved robust production and sales while turning profitable, with sales volume rising substantially compared to the same period last year.
Today, LFP batteries represent one of the mainstream technical routes for power batteries, driving sustained growth in the LFP raw material sector. Recently, several leading LFP cathode material manufacturers are targeting high-end production capacity, sparking a new wave of expansion. Many of these companies have already begun planning overseas capacity expansions.
Booming Market Momentum
The sustained heat in the LFP industry stems primarily from surging demand in new energy vehicles and energy storage sectors. Combined with factors like scarce phosphate ore resources, technological upgrades, and policy support, a supply-demand gap is gradually forming.
From the demand side, the market demand for lithium iron phosphate in energy storage batteries is steadily increasing. Research and statistics from the High-Tech Industrial Research Institute for Energy Storage (GGII) show that China's energy storage lithium battery shipments reached 165GWh in the third quarter of 2025, a year-on-year increase of 65%. Cumulative shipments for the first three quarters of 2025 totaled 430GWh. The industry is expected to maintain full production and sales capacity in the fourth quarter, with annual shipments projected to reach 580GWh—a growth rate exceeding 75%.
Additionally, data from the China Automotive Power Battery Industry Innovation Alliance indicates that cumulative power battery installations in China reached 493.9GWh during the first three quarters of this year, marking a 42.5% year-on-year increase. with lithium iron phosphate batteries accounting for 402.6 GWh, representing 81.5% of the total and surging 62.7% year-on-year. In September alone, power battery installations reached 76.0 GWh, with lithium iron phosphate batteries at 62.2 GWh, making up 81.8% of the total—a new high for the year.
The third quarter indeed demonstrated robust demand in the LFP battery sector, with companies enjoying ample orders. This high level of industry activity is expected to continue into next year.
Notably, downstream manufacturers of LFP batteries have launched a frenzied wave of “order locking” this year, demanding material suppliers guarantee supply and maintain stable quality.
Industry consensus holds that the high growth momentum in the LFP battery sector will persist in the medium to short term (projected 3 to 5 years).
Premium Market in Short Supply
Currently, the lithium iron phosphate industry is experiencing robust technological innovation, primarily manifested in comprehensive improvements in energy density, fast-charging capability, and packing density. This wave of upgrades has directly fueled structural market prosperity. Within this industrial recovery, products featuring premium characteristics such as high packing density, fourth-generation technology, or specialized energy storage applications are particularly in high demand, creating a “supply-constrained” market dynamic.
To seize opportunities in the high-end market, many leading LFP cathode material manufacturers are targeting premium capacity, sparking a new wave of expansion.
Additionally, numerous top LFP producers have intensified their overseas布局 efforts, actively expanding production capacity.
As leading companies establish overseas footholds, the competitive landscape of the LFP market is being reshaped. The industry is accelerating a “Matthew Effect,” where top players dominate through resource integration capabilities, economies of scale, and overseas advantages, while smaller manufacturers are gradually being weeded out.
Against the backdrop of “anti-internal competition,” the industry's competitive focus will shift toward high-end products, technology, and globalization capabilities. Companies must transition from competing on output to competing on product strength, particularly by gaining advantages in new metrics such as high-pressure compaction, extended lifespan, and enhanced safety. Only then can they advance further in the mid-to-high-end market segments.
If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.
