GM’s Shift to LFP Batteries Set to Slash $6,000 Off EV Costs, Bolstering Affordability and Eco-Friendliness

General Motors revealed on Tuesday their strategy to incorporate economical lithium iron phosphate (LFP) batteries in their upcoming electric vehicles, potentially reducing the cost by $6,000.

Officials at GM have disclosed at an investment meeting that the upcoming Bolt EV will incorporate LFP cells, among other adjustments in production and design, which could reduce the manufacturing expenses of electric vehicles by $6,000 in comparison to the existing versions. This was highlighted in a piece by InsideEVs.

2020 Chevrolet Bolt EV Evaluation – Update from Portland, OR

General Motors had earlier hinted at the production of an economical variant of the forthcoming Bolt EV, incorporating LFP batteries. This move is anticipated to position it as the most cost-effective electric vehicle in the American market, a title GM aspires to hold. The updated Bolt EV is projected to hit the market in 2025, branded as the 2026 model. However, the availability of the LFP battery model right from the start remains uncertain.

It's worth mentioning that when it comes to the Bolt EV, which has a comparatively smaller battery pack, the savings from battery-related changes are probably below the $6,000 estimate that comes with changing the battery chemistry.

InsideEVs has indicated that General Motors is currently engaging in discussions with TDK Corporation, a Japanese company, to produce LFP batteries on American soil utilizing technology under license from CATL. Earlier in the year, there were reports of General Motors pursuing a direct deal with CATL for battery supply within the United States. However, the introduction of "foreign entity of concern" terminology into federal electric vehicle tax credit regulations has created a somewhat ambiguous legal situation regarding the production of batteries that originate from Chinese patents.

Illustrative design of the Ultium Cells facility planned for Tennessee

Around 20% of global electric vehicle batteries consist of lithium iron phosphate (LFP). This type avoids the heavy reliance on materials like nickel and cobalt, thus reducing costs and minimizing environmental and political disputes. Additionally, LFP batteries have a lower risk of overheating, thermal runaway, and damage due to high temperatures compared to nickel manganese cobalt (NMC) batteries present in existing GM electric vehicles. While adoption in the United States has been gradual, it's on an upward trend, with companies like Ford looking to produce LFP batteries through an agreement with CATL.

As of now, General Motors has concentrated on a particular NMC pouch cell design, created in collaboration with LG. However, in 2023, CEO Mary Barra indicated that the company is open to different types of battery cells and has been considering alternatives for some time. It seems that GM is now prepared to invest in these other options, a move that probably influenced the choice to phase out the Ultium label, primarily linked to their first pouch cells, as they aim to expand their range.

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