Medium-Nickel Batteries Slow Down Shift to New Chemistries

China’s electric vehicle (EV) market is facing challenges in moving away from nickel and cobalt in batteries. While manufacturers have shifted from nickel-rich batteries to cut costs and decrease supply risks, interest is now growing in a type of nickel battery that is more cost-effective due to a lower nickel content that still offers high energy density and driving range.

Contemporary Amperex Technology Co. is leading the way with “medium-nickel, high-voltage” batteries, which benefit from technological advancements and reduced material costs. “This appears to be a strategic move to extend the use of NMC (nickel-manganese-cobalt) batteries and offer a differentiated product for both domestic and international markets,” said Aaron Wade, Head of Battery Costs, CRU Group.

Chinese automakers including Xiaomi Corp., Li Auto Inc., and Zeekr—backed by Zhejiang Geely Holding Group Co.—are already using these medium-nickel, high-voltage batteries. South Korea’s LG Energy Solution Ltd. is set to start production next year, and CNGR Advanced Material Co., a key battery materials supplier, views their adoption as vital for the EV sector.

China’s EV and battery leaders have traditionally been at the forefront of changes in battery chemistry. However, medium-nickel, high-voltage batteries are now emerging as a compelling option. As a result, the expected swift phase-out of mid-nickel batteries has slowed. “In the long run, as applications seek to balance high energy density with cost-effectiveness, both LFP and ternary material batteries are anticipated to coexist and evolve together,” CNGR noted.