Samsung Targets Tesla, Nio With Lithium-ion Phosphate Battery Development: Korea Herald - (SSDIY)

Samsung SDI Co Ltd SSDIY is developing lithium-ion phosphate (LFP) batteries at the firm's research and development center in Suwon, Gyeonggi Province, Korea Herald reports.
LFP batteries offer lower prices and stability by using phosphoric acid and iron as the primary materials attracting Tesla Inc TSLA and NIO Inc NIO. They are relatively safer from fire risks, lower in energy density, and heavier in weight.
The Chinese companies predominantly manufacture them. Contrastingly lithium-ion batteries contain expensive metals such as nickel, cobalt, and manganese.
Samsung aims to tap the demand surge for energy storage systems. Energy storage systems are huge batteries that store excess electricity generated by renewables.
In 2020, Samsung SDI controlled 31% of the global ESS market. Therefore, Samsung SDI's commanding status is rendered as vulnerable as ESS trends gradually shift toward LFP batteries.
The share of LFP batteries in the global battery market will likely surge from 10% in 2015 to 30% in 2030. In the same period, lithium-ion batteries will likely contract from 70% to 30%.
The dominance of LG Energy Solution and CATL in the lithium-ion battery market explains Samsung's move.
The battery business suffers from high recall risks. The cost-cutting is limited as minerals account for 60% of total costs leading. Thus the business enjoys just a 10% operating margin versus the chip's 30% margin.