CATL’s Lithium Iron Phosphate Production Surges Towards 1 Million Tons by 2026

Ningde Times’ Lithium Iron Phosphate Capacity Surges to Nearly 1 Million Tons

As of April 8, 2025, Ningde Times has entered a phase of explosive growth in its lithium iron phosphate (LiFePO4) production capacity. Recently, the city of Yichang held a ceremony for the commencement of significant projects in the second quarter of 2025, which included the launch of the Bangpu next-generation battery cathode materials project. This project has a total investment of 5.6 billion yuan and utilizes the industry’s leading fourth-generation lithium iron phosphate technology. It aims to construct three of the largest single-unit lithium iron phosphate workshops in China. Once fully operational, they are expected to generate an annual output value of 14.5 billion yuan, further enhancing Ningde Times’ self-sufficiency in lithium iron phosphate materials and securing the supply for the company’s battery production, thereby contributing to the establishment of a circular system for the entire battery industry chain.

The Rise of Ningde Times in Lithium Iron Phosphate Production

Driven by the rapid growth of the global new energy vehicle and energy storage markets, lithium iron phosphate has taken center stage in the global renewable energy sector. As a leader in the lithium battery industry, Ningde Times’ strategy for lithium iron phosphate materials not only impacts its competitive stance but also shapes the dynamics of the global power battery industry. Currently, Ningde Times has three major lithium iron phosphate projects in operation, collectively reaching a production capacity of 770,000 tons.

• The first project is a lithium iron phosphate production base established in Jintang, Chengdu, in 2021. Located in the Aba Industrial Concentration Development Zone, this facility is expected to achieve an annual production capacity of 100,000 tons of lithium iron phosphate, serving as a primary source of raw materials for Ningde Times’ batteries in Sichuan.
• The second project, initiated in 2021 in Yichang, is the Bangpu integrated new energy industry project. This ambitious initiative plans to establish a large-scale production base with an annual output capacity of 360,000 tons of iron phosphate, 220,000 tons of lithium iron phosphate, 180,000 tons of ternary precursors and materials, 40,000 tons of lithium cobalt oxide, 40,000 tons of regenerated graphite, and 300,000 tons of battery recycling, with full production anticipated by 2025.
• The third project mentioned is the new-generation lithium iron phosphate initiative, which was confirmed in January this year through an investment agreement signed between the Yichang government and Yichang Bangpu Times New Energy Co., Ltd. This project plans to produce 450,000 tons of next-generation lithium iron phosphate annually, with production set to commence in 2026.

However, for Ningde Times, which is fully committed to promoting lithium iron phosphate batteries, these capacities may still be insufficient. An announcement from Longpan Technology earlier this year revealed that it expects to engage in sales transactions with Ningde Times worth no more than 7 billion yuan and procurement transactions amounting to no more than 1.32 billion yuan in 2025. Based on the current price of lithium iron phosphate at 33,400 yuan per ton, this order could equate to approximately 210,000 tons of lithium iron phosphate. Additionally, according to a business cooperation agreement signed between Fulimin Precision and Ningde Times, the latter has committed to purchasing at least 140,000 tons of lithium iron phosphate materials annually from Jiangxi Shenghua during the period from 2025 to 2027. Jiangxi Shenghua has committed to achieving an annual production capacity of 75 tons of lithium iron phosphate cathode materials that meet Ningde Times’ production requirements. Consequently, the total lithium iron phosphate capacity from both self-built and ordered sources for Ningde Times is approaching 1 million tons.

Understanding the Implications of 1 Million Tons

What does a capacity of 1 million tons mean? Calculating based on the requirement of 2,200 to 2,500 tons of lithium iron phosphate for a 1 GWh battery cell, this capacity could support the production of 454 GWh to 400 GWh of lithium iron phosphate batteries. This not only gives Ningde Times significant leverage in the lithium battery materials sector but also enables the company to maintain high gross margins in its battery product sales. According to annual reports, in 2024, Ningde Times’ gross margin for power batteries is expected to rise by 5.8 percentage points to 23.9%, while the gross margin for energy storage batteries is projected to increase by 8.2 percentage points to 26.8%, leading to an overall sales gross margin of 24.4%, a year-on-year increase of 1.5 percentage points.

High-Density Products in High Demand

It is noteworthy that unlike the Chengdu Jintang base and the Yichang industrial park projects, Ningde Times’ current initiative focuses on fourth-generation lithium iron phosphate products, known as high-density lithium iron phosphate. While high-density lithium iron phosphate is not a novel concept, it represents an evolved form of lithium iron phosphate. Generally, with a constant volume, the higher the packing density of the cathode material, the greater the energy density. Currently, mainstream lithium iron phosphate products are categorized into second, third, and fourth generations, with packing densities of 2.4 g/cm³, 2.5 g/cm³, and 2.6 g/cm³, respectively. Products with a packing density of 2.6 g/cm³ and above are defined as high-density products in the market. This category of high-density products achieves dual enhancements in energy density and charge rates by increasing the amount of active material packed within a unit volume, and they are primarily used in mid-to-high-end power and energy storage battery products, including ultra-fast charging batteries and 300+ Ah iterative energy storage batteries.

Currently, the demand for fourth-generation high-density lithium iron phosphate primarily comes from ultra-fast charging batteries. According to Ningde Times’ plan, by 2025, the proportion of fast-charging battery products, including the Shenhung ultra-fast charging battery, is expected to exceed 70%, which signifies a substantial increase in the demand for high-density lithium iron phosphate. However, the production of high-density lithium iron phosphate products imposes stricter requirements on the preparation of precursor iron phosphate and the size ratio of material particles, leading to a continuous tightening of the supply-demand relationship.

Market research indicates that by 2025, the industry demand for high-density lithium iron phosphate products is projected to reach 730,000 tons, while the supply is expected to be 780,000 tons. Some industry insiders have humorously noted that “the fourth-generation lithium iron phosphate production lines of a leading enterprise in Central China are already ‘smoking’.” High-density products have become a battleground for major players. Currently, Fulimin Precision has publicly stated that its high-density lithium iron phosphate products have received recognition from core customers and leading manufacturers. Longpan Technology, through its subsidiary Changzhou Liyuan, has launched the fourth-generation high-density lithium iron phosphate S501, which has a powder packing density of 2.65 g/cm³; these products now account for 30% to 40% of Longpan Technology’s total lithium iron phosphate cathode materials. As the supply-demand relationship in the industry improves and new products continue to evolve, the profitability of relevant companies is expected to be optimized, and lithium iron phosphate batteries will find more applications in various fields, further expanding their market share.

Conclusion

In the rapid development of the new energy industry, each iteration of lithium battery technology resonates with the pulse of the global energy revolution. As the technological route for lithium batteries experiences diversification and deep innovation, the upgrades and modifications of key cathode and anode materials will be core drivers of this evolution. The competition for high-density lithium iron phosphate is a significant contest, and in this competition, Ningde Times is laying the groundwork for the next decade through its mastery of next-generation materials.