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In a strategic move to reduce vehicle costs and enhance competitiveness, NIO, the Chinese electric vehicle (EV) manufacturer, is transitioning to lithium iron phosphate (LFP) batteries. This shift, evident in NIO's 2025 Firefly battery using LFP cells from Sunwoda, is expected to make their vehicles more affordable and safer.
Compared to ternary lithium-ion batteries, which NIO previously used with nickel-manganese-cobalt (NMC) or nickel-cobalt-aluminum (NCA) chemistries, LFP batteries are less expensive as they avoid the use of expensive and scarce metals such as cobalt and nickel. This cost reduction enables NIO to price their vehicles more competitively in the EV market.
However, LFP batteries typically have lower energy density, meaning reduced vehicle range relative to NMC batteries of the same size and weight. To mitigate this, NIO and others have adopted battery designs that are modular or switchable, such as the CATL Choco-SEB system that offers flexible ranges up to about 370 miles by stacking battery blocks.
NIO's adoption of LFP batteries is set to make their vehicles more affordable and safe, enhancing market competitiveness due to lower raw material costs and longer battery lifespan. The tradeoff remains somewhat lower range compared to their previous ternary Li-ion battery setups, but innovations in battery modularity and swapping are helping to address this disadvantage.
In line with this strategy, NIO announced plans to launch swappable LFP batteries in Q4 2021. By doing so, they aim to reduce the cost of their cars and make them more competitive in terms of price. Additionally, less depreciation of vehicles is expected since the battery life degradation factor is completely wiped off with the use of LFP batteries. The cost of assembling a new vehicle plant is also expected to decrease with the use of LFP batteries.
NIO's switch to LFP batteries is reflective of a broader industry trend where automakers, including GM and Ford, are increasingly investing in LFP technology for cost savings and scalability while selectively retaining ternary batteries for higher performance EV models.
Moreover, NIO is following the approach of Tesla and Xpeng, who have also switched to LFP batteries. The performance variant of the NIO EC6 has a projected NEDC cruising range of 470km, while the performance variant of the NIO ES6 has a projected NEDC cruising range of 460km. The NIO ES8 has a projected NEDC cruising range of 445km.
In an exciting development, NIO will unveil a 150kwh semi-solid battery configuration in search of more efficiency. They will also include LFP into their battery-as-a-service (BAAS) program, with both battery types available all over the country at charging stations.
Perhaps the most anticipated release is the highly awaited flagship model ET7, which will have an LFP battery option, reducing its price. This move is a significant step in the race for battery, performance, and budget in the EV industry.
[1] https://www.nature.com/articles/s41598-020-64118-x [2] https://www.reuters.com/business/autos-transportation/nio-switches-lithium-iron-phosphate-batteries-cut-costs-raise-competitiveness-2021-09-23/ [3] https://www.autonews.com/electric-vehicles/nio-to-launch-lithium-iron-phosphate-batteries-q4-2021 [4] https://www.greencarreports.com/news/1133205_nio-to-offer-lithium-iron-phosphate-batteries-in-battery-as-a-service-program
- NIO's transition from ternary lithium-ion batteries to LFP batteries, as shown in the Firefly battery, aims to make their electric vehicles more affordable and safer, due to lower costs and longer battery life.
- Unlike LFP batteries, ternary lithium-ion batteries, such as those with NMC or NCA chemistries, are more expensive because they use scarce metals like cobalt and nickel.
- To counter the lower energy density of LFP batteries, NIO and other companies have adopted battery designs that are modular or switchable, like the CATL Choco-SEB system, offering flexible ranges up to 370 miles.
- NIO's plans to launch swappable LFP batteries in Q4 2021 are expected to further reduce the cost of their cars and increase competitiveness in the personal-finance and automotive industry.
- In the EV market, companies like GM, Ford, and Tesla are following NIO's example in transitioning to LFP batteries for cost savings and scalability while retaining ternary batteries for higher performance models.
