Compared with ternary batteries, lithium iron phosphate batteries have the advantages of higher safety and lower cost, which are favored by more and more automobile manufacturers, and the industry prosperity is constantly improving.

On March 29, 2020, BYD officially launched the blade battery, announcing that its range reached the same level as the ternary lithium battery, and more smoothly passed the daunting "acupuncture test". On December 20, 2021, Guoxuan Gaoke announced that the company's overseas wholly-owned grandson company and a large listed automobile company in the United States (which one was not disclosed) signed a "strategic supply and localization agreement." According to the agreement, from 2023 to 2028, Guoxuan Gaoke will supply lithium iron phosphate batteries to this customer, who expects to purchase no less than 200GWh of batteries during the demand period. For the above large U.S. listed car companies, the industry is more speculation for Tesla. There are constantly industry giants plus code lithium phosphate track, lithium phosphate against three yuan, and have a more adequate base, or will usher in the "era of revival".

In the first half of 2021, lithium iron phosphate battery production totaled 37.7GWh, accounting for 50.5 percent of total power battery production, up 334.4 percent year-on-year; cumulative sales 30.8GWh, up 260.0 percent year-on-year. The cumulative loading volume 22.2GWh, up 368.5 percent year-on-year, accounting for 42.3 percent of the total loading volume. The output of lithium iron phosphate batteries is in a rapid rise cycle. The recovery of demand for lithium iron phosphate has led a large number of enterprises to invest in the production track of lithium iron phosphate. According to incomplete statistics, the production capacity of lithium iron phosphate currently in production is about 680000 tons, and the announced production capacity under construction and proposed construction is about 4.254 million tons, which is more than 6 times of the current production capacity, involving more than 30 enterprises and about 40 construction bases.

The main raw materials of lithium iron phosphate are lithium source and phosphorus source, the lithium source mainly comes from lithium carbonate, and the phosphorus source mainly comes from iron phosphate, which continues to extend upward to phosphoric acid-phosphate rock. As can be seen from the above figure, the distribution of lithium iron phosphate production capacity under construction and proposed construction is mainly concentrated in the southwest region, which is rich in lithium and phosphorus sources, accounting for 42.38 percent of the total production capacity under construction and proposed construction in the future.

The huge new production capacity of lithium iron phosphate indicates a huge demand for phosphorus sources in the future. According to statistics from Longzhong Information, the current demand for phosphorus sources of lithium iron phosphate is about 530000 tons/year, and the demand for phosphorus sources of lithium iron phosphate only accounts for 7.69 of the current total production capacity of phosphoric acid. After all lithium iron phosphate production capacity is put into production and released in the next five years, the annual demand for phosphoric acid is expected to reach 3.79 million tons, and the total phosphoric acid production capacity is expected to reach 6 million tons/year. In the future, the demand for phosphorus sources for lithium iron phosphate is expected to account for 56% of the total phosphoric acid production capacity. Excluding the elimination of overcapacity caused by the rapid outbreak of lithium iron phosphate production capacity, the demand for phosphorus sources for lithium iron phosphate is expected to account for about 30% of total phosphoric acid. If converted into the demand for phosphate rock, the proportion of demand will rise from the current 1% to more than 10%. In the future, the demand for phosphorus sources from lithium iron phosphate batteries will continue to increase the supply tension of phosphorus sources. On the other hand, the phosphorus industry chain will also open up a new situation in demand. (The above phosphoric acid production capacity only includes 85% phosphoric acid production capacity)