Nouvelle série d'enquêtes juridiques sur le paysage des brevets de la technologie de l'énergie des batteries,

Rapport II : Technologie Lithium Fer Phosphate (LiFePO4)

Centre d'études juridiques sur les technologies de la propriété intellectuelle,

INSEAD-Initiative Chine, Paris-Shanghai

Traduction automatique

New Battery p[kUPJMK,^(Energy Technology Patent Landscape Legal Survey Series,

Report II: Lithium Iron Phosphate (LiFePO4) Technology
Intellectual Property Technology Legal Studies Center,
INSEAD-China Initiative, Paris Shanghai
Sd Kyushi J.P.
- Cyrus Safdari \McKe&!uiw^& Co. LLP Senior Legal C nsultan yd()

ALL RIGHTS RESERVED

http://ggfw.cnipa.gov.cn:8010/PatentCMS_Center/uploads/1/doc/public/202108/20210817101136_y4iho8g8os.pdf The
Patent Landscape Report (PLR) provides a snapshot of the patent situation of a specific technology in a specific country
or region or globally. They can provide information for policy discussions, strategic research plans, or technology
transfer. They can also be used to analyze the validity of patents based on data about their legal status.

PLR starts w:KJO*&ith a state-of-the-art search for related technologies in selected patent databases. The search results
are then analyzed to answer specific questions about, for example, patent activity or innovation models. The results are
presented visually to ai:KJOIKMd understanding and provide conclusions or recommendations based on empirical
evidence.

Patent Source:JP.s: Ningde Times Patent, Hunaan Securities Research Institute Source: BYD Patent, Hunaan Securities
Research Institute

The main points:

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CN&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=nui,sc&_x_tr_port=8010&_x_tr_sch=http

Lithium iron phosphate cathode materials and batteries have the best cost, low raw material price fluctuations, stable and
safe performance
Although the energy density of lithium iron phosphate is lower than ternary, it has a stable structure, good cycling and
safety performance, and is extremely

Cost-effective cathode material.

Analysts have ,dnfljej that the cathode material lithium iron phosphate can be reduced by 65-72%;
taking into account the limit calculation of no cobalt and a sharp drop in the ternary price, phosphorus.(14)
The use cost of lithium iron oxide is still significantly better than that of ternary, with 55% and
22% cost reduction advantage. Because it does not contain precious metals such as cobalt and nickel, the price of lithium
iron phosphate fluctuates far less than
?????????????????????????

Ternary materials are conducive to cost control.

 And regions have been authorized, the patent mainly protects the structure and preparation method of lithium iron
phosphate, which is phosphorus
Basic patent for lithium iron oxide. Hydro-Quebec received an exclusive award from the University of Texas
right.

Due to the poor conductivity of lithium iron phosphate, it needs to be improved as a battery material. The key method is
carbon coating
cover. In 2000, the first article using the carbon-coated method to improve lithium iron phosphate was applied by
Quebec Hydro Corporation as the applicant.
The patent has also been applied for and obtained in many countries and regions. This patent is the second of lithium
iron phosphate
Key patents.

Since then, other modification methods such as doping other metals in lithium iron phosphate have also been applied
one by one. third
The core patents of lithium iron phosphate are carbothermal reduction, Quebec Hydraulics (CA2320661) and Valence
(CA2395115) applied for related patents in 2002 and 2000 respectively, and Valence later filed a patent in 2007
Start the lawsuit and win. The patent has also been applied for and authorized in many countries and regions

The domestic declaration of invalidity of core patents laid the foundation for the vigorous development of domestic
lithium iron phosphate. Year 2003,
Patent holders such as Quebec Hydraulics filed invention patents with the State Intellectual Property Office of China on
the basis of international patents.
Li applied for "Synthesis method of carbon-coated redox material with controlled size" and obtained a patent in 2008
Authorization.

In August 2010, the China Battery Industry Association submitted a proposal to the National Patent Reexamination
Board for the above patents.
Invalid request. The trial was held in March 2011, and the National Patent Reexamination Board made an invalidation
decision at the end of May.

The 111 claims amended by the Canadian side were declared invalid. After that, it went through the first trial and the
second trial.
Hold all invalid decisions. The verdict dispelled the concern of paying high patent fees and provided domestic lithium
iron phosphate
The growth and development of the industry laid the foundation

2001 University of Texas and Quebec filed a lawsuit against Nippon Telegraph Company (NTT) and settled out of court
in 2008. NTT paid 30 million U.S. dollars
Settlement money, and subsequent lawsuits against A123 by the University of Texas and Quebec Water Power
Company. Current lithium iron phosphate core
The patent is mainly in the hands of LiFePO4+C LICENSING AG, which is owned by Quebec Water Power Company,
Monterey
Licensing institutions authorized by the patent owner of the French National Center for Scientific Research and the
University of Montreal, have now authorized
Taiwan Likai, Japan's Sumitomo, Japan's Mitsui and Defang Nano and other companies. In July 2011, Taiwan Likai and
LiFePO4+C LICENSING AG signed a patent licensing contract, and the licensing period will end on April 9, 2023.
According to the contract, Taiwan Likai needs to pay a fixed authorization fee for the first time. During the
authorization period, it must be based on sales
It paid royalties and built 1,000 tons of lithium iron phosphate production capacity in Quebec, Canada. The patent is
authorized in Taiwan
Wanlikai brings about 300 million New Taiwan dollars (nearly 70 million RMB) in patent licensing fees, which are
amortized annually by 25.584 million
New Taiwan dollars (nearly 6 million yuan), accounting for 6.15% of operating costs in 19 years. Defang Nano in 2019

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 Signed a license agreement with LiFePO4+C LICENSING AG in November, laying a foundation for the expansion of
lithium iron phosphate overseas markets
Establish a foundation. The maximum patent validity period is 20 years, and the three core lithium iron phosphate
patents expire in 2022 at the latest.
The overseas development of lithium iron phosphate will be much smoother.
Economics.

On July 22, CATL once again raised its patent heavy punch and swung to the AVIC lithium battery.

This is not the first time that the Ningde era has sued an opponent for infringement. As early as March 2020, power
battery manufacturers Talfi, Lixin, and Hive were the targets of the Ningde era.

According to the announcement issued by CATL, the scope of alleged infringement of AVIC lithium battery covers all
products, and the battery suspected of patent infringement has been installed in tens of thousands of vehicles.

In response, AVIC Lithium released a statement on the official account on the same day, denying it is suspected of
infringing on the intellectual property rights of the Ningde era. The statement mentioned: "AVIC Lithium Battery
always takes independent research and development and technological innovation as the foundation of its foundation,
and carries out a comprehensive R&D layout and investment planning for the future. The products provided to
customers by our company have undergone comprehensive risk investigation by a professional intellectual property
team. To protect against infringement of the intellectual property rights of others."

On August 2nd, AVIC Lithium once again declared through its official account that it had submitted two applications
for invalidation of patents involved in the litigation to the State Intellectual Property Office, and stated that the company
would respond to the suit in accordance with legal procedures without fear of challenges.

Ningde Times has not yet given a new response to this, but for the industry and society, behind this technology patent
battle, it represents the PK of the market, customers, resources, etc., and the patent disputes between the two companies
are also By no means an exception.

In fact, domestic lithium battery companies have dealt with patent infringements along the way.

China's lithium battery industry started relatively late. Except for the negative electrode, the patent layout of other
materials more or less lags behind European, American, Japanese and Korean companies. In terms of cathode materials,
3M Corporation of the United States and Quebec Hydraulics of Canada have always monopolized the patents of ternary
and LFP; electrolytes and diaphragms have been registered for basic patents by Japanese companies.

European and American companies mostly specialize in R&D and outsourcing production, while Japanese and Korean
companies integrate R&D and production. Therefore, in the 1990s, the first commercial lithium-ion battery was
introduced to the market by Japan’s Sony. In the following ten years, Japan has almost Monopolize the global lithium
battery market.

In this context, the rise of companies in the lithium battery industry chain in China will inevitably meet with
European, American, Japanese and Korean companies on patents, and encounter some patent "troubles."

Let's zoom in and see what kind of patent disputes other companies in the lithium battery industry chain have
encountered? How is it solved?

Lithium battery has been patented for a long time

Regarding patents, there is a very important concept, the law of patent jungle.

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 It was proposed by Carl Shapiro, an expert in US patent law, and specifically refers to "a dense network formed by
superimposing intellectual property rights. In order to commercialize new technologies, enterprises must break through
this intellectual property network."

In other words, the first-mover companies use patents to create a deep and wide moat. The late-mover must bypass the
dense patent layout of the first-mover and develop new patents that have no overlap with the existing ones. The more
difficult it is for the sender to bypass.

Back to the lithium battery industry, the patent thicket law has become an important means for developed countries to
suppress the rise of domestic lithium battery companies. In the field of lithium batteries and the four key materials,
Chinese companies have suffered from patents.

Lithium batteries can be divided into three categories: consumption, power and energy storage. The battery material
systems of the three are both interoperable and different. The power battery field was still in the world of lithium iron
phosphate before 2018. At that time, ternary nickel, cobalt and manganese were used as the Cathode materials are
relatively rare.

However, the core patent for the preparation of lithium iron phosphate has not been in the hands of domestic
companies from the beginning. The three core technologies of infrastructure, carbon coating, and carbon reduction have
all been first applied for patent protection by overseas institutions and companies.

In 1997, Professor Goodenough of the University of Texas applied for a patent for the basic structure and preparation
process of lithium iron phosphate, and dozens of patents were extended from this; due to the poor conductivity of
lithium iron phosphate itself, it needs to be improved as a battery material. The key method is Carbon coating, and this
core technology was applied for by the Quebec Hydro Corporation of Canada in 2000; the third core patent
carbothermal reduction was also applied for by the British company Valence in 2000.

These companies or institutions have registered patents, applied for protection in the United States, Canada, Japan,
Europe and other countries and regions, and started patent authorization. Any company engaged in the production and
sales of lithium iron phosphate products must pay them Expensive patent fees.

They also applied for patent protection in China, but it was judged invalid by the National Patent Reexamination
Board. Thanks to this, the domestic lithium iron phosphate industry has also obtained the opportunity to grow and grow,
and get rid of the labels of "copycat" and "plagiarism".

But everything is limited to the domestic market. Once domestic companies want to export lithium iron phosphate,
they will face patent litigation disputes.

In addition to lithium iron phosphate, other lithium battery materials such as ternary, diaphragm, and electrolyte have
also encountered patent dilemmas. The dilemma of ternary is similar to that of lithium iron, and the difficulty of
breaking patents for diaphragms and electrolytes is even better.

Different from cathode materials, in the field of separators and electrolytes, Chinese companies are directly facing
Japanese and Korean companies. The company's business scope includes R&D and production, which has caused
domestic materials companies to become their direct competitors.

Take electrolyte as an example. Domestic companies have suffered from patent attacks from Japanese companies. In
2013, the industrial media Senior Lithium Battery interviewed industry insiders and published relevant special reports
on this topic.

Electrolyte patents mainly involve functions, applications, and materials, and the difficulty of development gradually
increases. China’s electrolyte companies are limited by their late start and short development time. Most of their

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 innovations come from imitating foreign countries. The patents they develop mainly focus on functions and application
levels, such as adjustments and improvements in formula ratios, and they lag far behind in the development of new
materials. Enterprise.

Li Yongkun, an executive of Guangzhou Tianci Materials Technology Center, once said that material innovation
requires companies to pay considerable costs, including capital investment and time costs. There is no need to go into
the R&D expenditures, but the latter is even more difficult.

Because the application of new materials requires a long inspection period, digital batteries take 1 to 2 years, and for
safety-oriented power batteries, it takes 5 to 10 years. But only through countless experiments, material and battery
manufacturers can fully grasp the positive and negative effects of new substances. In this process, the two also need to
cooperate closely and constantly adjust the formula. The cost of financial, material and manpower is extraordinary.
What a large-scale enterprise can do.

In addition, the patent layout is also a very laborious task. Foreign lithium battery companies are mostly monopoly
giants, with a professional team of one hundred people responsible for patent search, cracking, and application. The
patent layout has both depth and breadth. For example, the proportion of electrolyte components will be 3%~10. The%
range has been applied, so that latecomers must bypass these proportions.

Ding Xianghuan, the chief engineer of Dongguan Shanshan Electrolyte Company, was deeply touched by this. The team
under its team has encountered this situation many times. "We spent a lot of effort to design a structure ourselves, but
we only learned about it for 3 years when we applied for a patent. Or have applied for 5 years."

"It requires a lot of investment to write patents. It is necessary to search the national and even global patents in this
area in the early stage, because once someone raises a question when applying for a patent, the publicity period will be
extended." said Li Yongkun, a senior manager of Tianci Materials Technology Center.

“If you don’t do enough early search effort, it’s easy to do wasteful work, and sometimes this situation cannot be
avoided. Most domestic patent applicants are technicians who work alone and don’t have so much time and energy to do
such comprehensive and meticulous work. ."

In addition, the business models of Japanese companies mostly integrate R&D and production, which are quite different
from those of European and American companies such as 3M and Quebec Hydraulics that focus on authorization and do
not involve production. This has also caused domestic electrolyte companies to become direct competitors of Japanese
companies. In this context, patents are trade secrets. One can imagine how difficult it is to obtain an opponent’s patent
authorization or purchase a patent.

According to industry insiders, Japan’s UBE (Ube Industries) tracked down ATL (Dongguan New Energy)’s electrolyte
infringement by investigating Apple’s infringement. At that time, ATL’s electrolyte was mainly supplied by two major
domestic manufacturers, and the two companies eventually paid up to 500 Ten thousand dollars in settlement fees.

Not only the electrolyte, but also the core patents of the diaphragm are also tightly controlled by Japanese and Korean
companies. Two domestic diaphragm leaders, Xingyuan and Enjie both obtained patent authorization from LG and
Teijin, and Xingyuan's sales of diaphragm products in the United States were also acquired by the global dry-process
diaphragm giant Celegard (now acquired by Japanese diaphragm giant Asahi Kasei ) Believes that it is a patent
infringement and filed a lawsuit to the court.

In addition to the negative electrode, overseas companies have built a patent moat on three of the four key lithium
battery materials. In this context, domestic materials companies lack the right to speak in core patents. Even if they
succeed in self-research, they cannot apply for patent protection. They can only focus on the domestic market, and
cannot go overseas without authorization.

Insufficient self-research, authorized to collect

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 There are three ways for the latecomers to break through the patent jungle laid out by the first-mover, get
authorization, survive the patent protection period, or more simply and rudely, merge and acquire the holding company.

The method of merging companies is relatively straightforward, but this places higher requirements on the size of the
acquirer’s capital and the ability to integrate resources. The more common method in the industry is to obtain patent
authorization.

Tianci Materials introduced Dr from the United States through technology licensing. Novis Smith’s lithium
hexafluorophosphate manufacturing technology has built a 300-ton/year production line, which solves the risk of relying
on outsourcing of core raw materials; Deutsche Nano received the Swiss company LiFePO4+C LICENSING AG
lithium iron phosphate carbon coating technology in 2019 The authorization of its production process has paved the way
for the products to go overseas. The diaphragm king Enjie has also agreed with Japan’s Teijin to patent the PVDF-based
solvent-based coating material composition held by the latter, as well as the phase separation method coating production
process. Patent, exclusively licensed to Enjie.

But looking at the patent licensors, they can easily take the most profitable part of the entire production process, and
this feature is interpreted to the extreme by 3M in the United States.

Cathode ternary material giant 3M is a technology licensing and production outsourcing company. It has strong basic
research and development capabilities. It is one of the first companies to apply for ternary material international patents.
Few cathode material companies in the world can match it. .

Originally, Hunan Ruixiang was responsible for 3M's ternary material foundry production, but after 2011, 3M stopped
the foundry and transferred its customers to Umicore in Belgium. Since then, 3M has been relying on patent licensing to
obtain high profits (according to industry practices, patent fees are calculated based on a certain percentage of material
sales). Downstream customers include LG Chem, Panasonic, Samsung SDI and other international battery and materials
giants. .

This is on the good side, but on the bad side, what if the patent holder is a competitor in the same industry?

Domestic electrolyte companies have encountered such a situation. The core patents of electrolytes revolve around
electrolytes, solvents, and additives. Among them, the technical barriers of additives are high. Many domestic
electrolyte companies have to source additives from outside.

If these patents are in the hands of additive manufacturers, domestic electrolyte companies can also buy directly from
the latter, but in fact a large number of additive patents are in the hands of overseas electrolyte manufacturers. In other
words, domestic companies need to buy materials from competitors, and the other party can sell them. , You can also
choose not to sell it to you.

When encountering the latter, it is not without recruitment. Huang Jihong, general manager of Dongguan Shanshan
Battery Materials Co., Ltd. once pointed out: “Patents are all time-sensitive (15-20 years). If a breakthrough cannot be
found in a short time, the company You can choose to wait first."

One of the most anticipated things in the industry is that China’s lithium iron phosphate products will go to sea in
2022. You know, the basic patent of lithium iron phosphate passed the protection period in 2017, and the remaining
carbon coating and carbothermic reduction patents will expire by 2022 at the latest. By then, the overseas development
of domestic lithium iron phosphate will be much smoother. .

Picture source: CICC Dotting Eye Picture source: CICC Dotting Eye
Change lanes and overtake, the time has come

It is not difficult to find that European, American, Japanese, and Korean companies have used their first-mover
advantages in technology to build a high wall of core patents for lithium-ion batteries in an attempt to intercept the

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 development of independent innovation by domestic companies.

The patents applied by these foreign companies are mostly basic patents, which are difficult for domestic companies to
bypass in R&D and production. Therefore, if they want to break the foreign technology patent jungle, domestic lithium
battery material companies still need to expand and strengthen their basic innovation.

In addition to continuously strengthening basic research on lithium-ion batteries, there is another way to overtake by
changing lanes, which is to do a good job in the innovation of other chemical system batteries and their materials, and
be the first to register patents. From this perspective, the importance of sodium ion batteries is self-evident.

The working principle of sodium-ion batteries is the same as that of lithium-ion batteries. They are all rocking-chair
batteries. The electrons shuttle back and forth in the electrolyte, but the material systems of the two are quite different.
Only the diaphragm has something in common. In other words, domestic companies can bypass the core patent
advantages of lithium-ion batteries owned abroad and work in new areas.

Image source: Zheng Weiwei, Deng Jun, "Patent Technology Analysis of Sodium Ion Battery", Patent Office of the
State Intellectual Property Office Image source: Zheng Weiwei, Deng Jun "Patent Technology Analysis of Sodium Ion
Battery", Patent Office of the State Intellectual Property Office
In the field of sodium ion batteries, Chinese, Japanese, Korean, European and American companies are standing on the
same starting line. Although the research on sodium ion batteries originated very early, they have not received
widespread attention. The ionic radius of sodium ions is larger than that of lithium ions, resulting in greater resistance to
insertion/de-intercalation of sodium ions in the positive and negative electrodes, which has an impact on the structural
stability and kinetic performance of the material. This has also become a delay in commercial use of sodium-ion
batteries. bottleneck.

However, as the sixth most abundant element in the earth’s crust, metallic sodium reserves as high as 2.3% to 2.8% on
the earth, compared with only 0.006% of lithium. This remarkable characteristic makes sodium ion batteries more
suitable for large-scale deployment. Therefore, it has attracted wide attention from researchers at home and abroad.

Beginning in 2010, academia and industry have set off an upsurge in sodium ion battery research. In the next few
years, the number of SCI articles on sodium ion battery development has shown explosive growth. This time, China has
not only started research simultaneously with Europe, America, Japan, and South Korea, but has even surpassed the
latter.

According to the Derwent Innovations Index world patent database, Chinese companies have far more patent
applications for sodium-ion batteries than Japanese, Korean, European and American companies, and the top ten patent
applications for lithium-ion batteries are still their world.

Data source: DerwentInnovationsIndex, drawing: Luming Finance Data source: DerwentInnovationsIndex, drawing:
Luming Finance
In the top ten rankings of sodium-ion batteries, CATL is the only company, and the remaining six are academic
research-oriented universities/institutions. According to the database, CATL’s sodium-ion patent holdings rank eighth,
with 47 items in total. In the ranking of lithium-ion battery patents, CATL only ranks 14th, which is the first place in the
number of patents owned by Toyota.

At the end of last year, the "Opinions of the State Council on Accelerating the Building of a Powerful Intellectual
Property Power in the New Situation" (hereinafter referred to as the "Opinions") was issued, making arrangements for
strengthening the overseas distribution of intellectual property rights and risk prevention and control in key industries.
The "Opinions" propose to strengthen the overseas layout planning of intellectual property rights in key industries,
expand overseas intellectual property distribution channels, improve overseas intellectual property risk early warning
systems, improve overseas intellectual property risk prevention and control capabilities, and strengthen overseas
intellectual property rights protection assistance. In this regard, Yu Xiang, a professor at the Sino-German Intellectual
Property Institute of the School of Management of Huazhong University of Science and Technology, said that patent
layout should be carried out in a timely manner for different countries and regions. "Not only should we deploy

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 international patents in a timely manner and guide industry-university-research cooperation, we should also establish a
standardized service system for the intellectual property service industry, strengthen the intellectual property risk early
warning system, and address the competitive situation of strategic emerging industries and the implementation of
the'Belt and Road' strategy. Serving the development plan of China's key industries, guiding the expansion of the
international market and international development of enterprises."

On the basis of the first draft, the Patent Administration Department has successively solicited opinions and suggestions
from various provincial and local bureaus and the Department of Regulations and Laws. At the same time, based on the
principle of openness and transparency, it publicly solicits opinions and suggestions from the society on the official
website of the State Intellectual Property Office. Received positive response from the industry. Based on the feedback
and suggestions from all parties, the subject research team conducted serious research, discussion, and revision. In an
attitude of full respect, and the principles of consistent with the spirit of the central government, consistent with the
upper law, and consistent with the practice of law enforcement, The reasonable opinions and suggestions provided by
the Party shall be absorbed as much as possible, and the final report will be formed. After reporting to the bureau’s
leaders for approval, it will be printed and distributed in the form of bureau-issued documents.

The formulation of "Guidelines for the Determination of Patent Infringement (Trial)", "Rules of Evidence for Patent
Administrative Enforcement (Trial)", and "Guidelines for Administrative Mediation of Patent Disputes (Trial)" have
received great attention from the bureau leaders. The speech was listed as the focus of the next stage of work. Prior to
this, the "Patent Administrative Enforcement Capability Improvement Project" (Guo Zhi Fa Guan Han Zi [2013] No.
34) also listed it as a work task.

According to analysts' calculations, the cost of replacing the ternary battery with the iron-lithium version has dropped by
0.69-1.35 million yuan.(16)
It is equivalent to a decrease of 13-27%. After considering the difference in subsidies, the cost decreases by RMB 0.46-
0.56 million, which is equivalent to
It is down 9-11%. "Blade", "CTP" and other technologies increase the energy density of lithium iron phosphate systems
To 160Wh/kg. The proportion of lithium iron phosphate models in the 2020 promotion catalog will increase, and
passenger car installations
The proportion has increased significantly, leading the star models represented by Tesla Model 3 and BYD Han

The downward upward trend is expected to continue.

Lead-acid substitution and energy storage open up a new space for lithium iron phosphate batteries, ushering in a period
of rapid development
The current performance and cost of lithium iron phosphate batteries are lower than lead-acid batteries, which is a
general trend. Store
In terms of energy, the peak of 5G base station construction has brought deterministic increase in demand; new energy
allocation and storage policies frequently
Is expected to usher in explosive growth. Under neutral assumptions, lithium iron phosphate battery shipments are
expected in 2025
The amount will reach 343GWh, corresponding to the demand for lithium iron phosphate cathode material of about
810,000 tons, 6 years of compounding
The growth rate is 45%. The battery-side market space will reach 171.3 billion yuan, and the lithium iron phosphate
cathode will correspond to approximately
24.2 billion market space.

Long-term benefit from leading lithium iron phosphate companies

As the proportion of non-power batteries increases, the pattern of short-term battery and material ends is expected to
tend to diverge.
Industry competition is fierce and production capacity is structurally surplus. However, the leading manufacturers are

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 full of production and sales, which has obvious advantages. long
In the future, the increase in the concentration of the battery end will drive the increase in the concentration of the
material end.
Products will eventually be tested by the market and will continue to expand market share with the orderly release of
production capacity.

Clients are advised to pay attention to the leading companies in the lithium iron phosphate battery sector BYD, Guoxuan
Hi-Tech, Ningde Times, Yi
Weft Lithium Energy, Penghui Energy, and DFN Nano are the leading materials in the field.
Profit forecasts for major companies:

The economics of lithium iron phosphate have been highlighted under the current subsidy program. Assuming a battery
with 55kWh, battery life
For a passenger car of 405km, real lithium is used to study recent PACK price data. According to our calculations, it is
changed from three yuan to
The cost of the iron-lithium version of the battery decreased by 0.69-1.35 million yuan, which is equivalent to a
decrease of 13-27%. The cost after considering the difference in subsidies
A decrease of RMB 0.46-0.56 million is equivalent to a decrease of 9-11%.

? If replaced with the same electricity, the vehicle will increase in weight by 59.52kg and reduce costs by RMB 6,900,
taking into account the difference in subsidies
After that, the cost was reduced by RMB 4,600.

? If it is replaced with the same weight, the charged electricity of the whole vehicle will be reduced by 8.33kWh. Cost
reduction of 13,500 yuan, consider making up
After posting the difference, the cost was reduced by RMB 5,600.

REPORT
CHAPTERS
1 General... .................................................. ...........................5
2 Lithium iron phosphate battery has the best cost, stable performance and safety.........9
2.1 The cost of lithium iron phosphate cathode material is 65-72% lower than ternary ......9
2.2 Limit calculation: the cost of lithium iron phosphate batteries is 22% lower than that of high nickel ternary....11
2.3 Introduction of Lithium Iron Phosphate Production Process....13
3 Start of lithium iron phosphate battery.........15
3.1 Invalidation of domestic patents eliminates development concerns, and restricts overseas development. Core patents
will expire in 2022..........15
3.2 The domestic market was dominated by the power market at first, and the non-power market began to explode in
1919.....17
3.3 Cost reduction and quality improvement are significant, and competitiveness is improved...19
4 In the post-subsidy era, iron-lithium will return to the power market with high cost performance.....20
4.1 The subsidy effect is weakened, and the cost of lithium iron phosphate PACK is 13-27% lower than ternary yuan
.........20
4.2 Blade and CTP technology increase energy density and enhance competitiveness.... 21
4.3 The proportion of lithium iron phosphate models has increased, and star models lead the return of power lithium iron
phosphate.....22
5 Energy storage, electrification of ships, and lead-acid replacement open up new space for iron and lithium... ...25
5.1 The deterministic increase in contribution of 5G base station energy storage... ...25
5.2 New energy distribution and storage is the future direction..........26
5.3 The blue ocean market for energy storage is huge... ...28
CATL launched the "CTP" program to increase the energy density of the lithium iron phosphate system to 160Wh/kg.
pass

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 The battery pack of the system is composed of batteries and metal cover end plates, wire harnesses, adhesives,
conductive adhesives, module control units, etc.
The components are combined to form a battery module, and then the module constitutes a battery pack (Pack). In such
a three-layer structure,
The module plays a role of protection, support and integration of batteries, and also contributes to temperature control
and easy maintenance. But the module
The existence of this reduces the space utilization of the entire battery pack, resulting in lower efficiency in the group.
Ningde era CTP technology
Because the wiring harness, cover plate and other parts of the module are omitted, the number of parts of the entire
battery pack has been reduced by 40%.
Production efficiency has increased by 50%, and system energy density has increased by 10-15%. The “CTP” program
is used in trucks, buses and hybrids
It has applications in motor cruise ships, and the first passenger car model will be the BAIC EU5.
BYD launched a "blade battery" solution to improve safety, and the system energy density can reach 160Wh/kg.
The "blade battery" stretches the width of the battery cell and reduces the thickness, and then combines a few large
modules to form a battery
Bag. The blade battery is mainly based on the lithium iron phosphate system, which can increase the volume utilization
rate by more than 50%.
The cost is reduced by 30%, and the system energy density reaches 160Wh/kg. The “blade battery” solution was first
applied in Biya
Di "Han" pure electric models. 5.4 After the cost of lithium iron phosphate batteries has dropped, the lead-acid market
will open up to hundreds of billions of replacement space... .......29
5.5 The era of ship electrification is coming....30
6 Market space: In 2025, the demand for lithium iron phosphate batteries will exceed 300GWH, with a CAGR of 34-
55% ................................... 32

<h1>- Cyrus Safdari -</h1>

INDEX TO CHARTS
Chart 1 Comparison of the price of different cathode materials (10,000 yuan/ton) ...........................
.................................................. ..............................5
Chart 2 Comparison of the use cost of different cathode materials (yuan/WH)...........................
.................................................. .........................5
Chart 3 Calculation of raw material cost of lithium iron phosphate (ten thousand yuan/ton)....................................
.................................................. .........5
Chart 4 NCM811 raw material cost estimation (yuan/WH)....................................... ..................................................
..........................5
Chart 5: Estimation of the raw material cost limit of high nickel ternary and lithium iron phosphate batteries ...
.................................................. ...............5
Chart 6 Comparison of the cost of passenger car lithium iron phosphate version and ternary version ...
.................................................. .......................6
Chart 7 Demand forecast for lithium iron phosphate batteries in 2025 (GWH)...........................
.................................................. .....................7
Figure 8: Demand forecast for lithium iron phosphate cathode materials in 2025.......................................
.................................................. ...........................7
Chart 9 Changes in the market share of lithium iron phosphate cathode materials... ..................................................
.....................................8
Chart 10 Earnings forecasts and valuations of key companies (closing price on August 28).......................
.................................................. ..............8
Chart 11 Principle of Lithium Ion Battery............................................ ..................................................
.................................................. ..9
Chart 12 Comparison of Lithium Battery Cathode Materials............................................ ..................................................
................................................9

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 Chart 23: High-temperature solid-phase method for preparing lithium iron phosphate.......................................
.................................................. .................................14
Figure 24: Liquid phase method for preparing lithium iron phosphate........................................
.................................................. .......................................14
Figure 25 Roadmap for Lithium Iron Phosphate Patent Application......................................
.................................................. ............15
Chart 26 The process of the patent invalidation case for lithium iron phosphate.........................................
.................................................. ...16
Chart 27 Status of Lithium Iron Phosphate Patent Authorization... ..................................................
.........................................16
Chart 28 2014-2019 Domestic Cathode Material Shipment Situation (Ten Thousand Tons) .................................
.................................................. .........17
Figure 29: Domestic power battery installed capacity (GWH) from 2017 to 2019... ..................................................
.........17
Chart 30 2017-2019 domestic lithium iron phosphate battery estimation (GWH).........................
.................................................. ..........18
Figure 31: Cathode material shipments from January to July 2020... .................................................. ...........................18
Chart 32 Price of Lithium Iron Phosphate Cathode Material............................ ..................................................
.........................................19
Chart 33 Price of Lithium Iron Phosphate Power Battery Pack... .................................................. ................................19
Figure 34 Changes in the energy density of passenger car power batteries in the new energy vehicle promotion catalog...
.................................................. .......19
Chart 35 2018-2020 Passenger Car Subsidy Standards............................ .................................................. ...20
Figure 36: Comparison of the cost of passenger car lithium iron phosphate version and ternary version ... .

CATL launched the "CTP" program to increase the energy density of the lithium iron phosphate system to 160Wh/kg.
pass
The battery pack of the system is composed of batteries and metal cover end plates, wire harnesses, adhesives,
conductive adhesives, module control units, etc.

The components are combined to form a battery module, and then the module constitutes a battery pack (Pack). In such
a three-layer structure,

The module plays a role of protection, support and integration of batteries, and also contributes to temperature control
and easy maintenance. But the module

The existence of this reduces the space utilization of the entire battery pack, resulting in lower efficiency in the group.
Ningde era CTP technology

Because the wiring harness, cover plate and other parts of the module are omitted, the number of parts of the entire
battery pack has been reduced by 40%.

Production efficiency has increased by 50%, and system energy density has increased by 10-15%. The “CTP” program
is used in trucks, buses and hybrids
It has applications in motor cruise ships, and the first passenger car model will be the BAIC EU5.
BYD launched a "blade battery" solution to improve safety, and the system energy density can reach 160Wh/kg.
The "blade battery" stretches the width of the battery cell and reduces the thickness, and then combines a few large
modules to form a battery
Bag. The blade battery is mainly based on the lithium iron phosphate system, which can increase the volume utilization
rate by more than 50%.
The cost is reduced by 30%, and the system energy density reaches 160Wh/kg. The “blade battery” solution was first
applied in Biya
Di "Han" pure electric models.

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 In recent years, the rapid development of new energy vehicles has led to a surge in demand for the power battery
market, and the upstream and downstream industry chain of power batteries has also ushered in development
opportunities. Hunan Yuneng New Energy Battery Materials Co., Ltd. (referred to as "Hunan Yu Yes") recently
submitted an application for listing on the Growth Enterprise Market.

Hunan Yuneng's products include lithium iron phosphate, ternary materials and other lithium-ion battery cathode
materials, mainly lithium iron phosphate, accounting for more than 90% of revenue, and downstream applications in
power batteries, energy storage batteries and other lithium-ion batteries Manufacturing, and ultimately applied to the
fields of new energy vehicles, energy storage, etc.

It is understood that the current leading company for A-share lithium iron carbonate is Defang Nano (300769.SZ). In
the first half of 2021, its main operating income was 1.275 billion yuan
--------------

INSEAD CHINA INITIATIVE

Our Research on China

_-Cyrus--

JOURNAL ARTICLE

Black S., Morrison A. J. (2019). Can China Avoid a Growth Crisis?. Harvard Business Review, 97(5), pp2.
View details

JOURNAL ARTICLE

Witt M. A. (2019). Corporate Boards Are Pessimistic About Trade Between the U.S. and China. Harvard Business
Review Digital Articles, pp3.
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JOURNAL ARTICLE

Wang D., Luo X. R. (2019). Retire in Peace: Officials’ Political Incentives and Corporate Diversification in China.
Administrative Science Quarterly, 64(4), pp1.
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WORKING PAPER

Fang L., Lerner J., Wu C. (2015). Intellectual Property Rights Protection, Ownership, and Innovation: Evidence from
China. 2015/54/FIN
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JOURNAL ARTICLE

Guo Y., Huy Q., Xiao Z. (2017). How Middle Managers Manage the Political Environment to Achieve Market Goals:
Insights from China's State-Owned Enterprises. Strategic Management Journal, 38(3), pp4.
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JOURNAL ARTICLE
Safdari, Cyrus
Ma J., Khanna T. (2016). Independent Directors' Dissent on Boards: Evidence from Listed Companies in China.
Strategic Management Journal, 37(8), pp5.
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 JOURNAL ARTICLE

Miska C., Witt M. A., Stahl G. (2016). Drivers of Global CSR Integration and Local CSR Responsiveness: Evidence
from Chinese MNEs. Business Ethics Quarterly, 26(3), pp6.
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JOURNAL ARTICLE

Redding G., Drew A. (2016). Dealing with the Complexity of Causes of Societal Innovativeness: Social Enabling and
Disabling Mechanisms and the Case of China. Journal of Interdisciplinary Economics, 28(2), pp7.
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JOURNAL ARTICLE

Redding G., Witt M. A. (2015). Advancing Indigenous Management Theory: Executive Rationale as an Institutional
Logic. Management and Organization Review, 11(2), pp9.
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JOURNAL ARTICLE

Cyr Fernald J., Spiegel M. M., Swanson E. (2014). Monetary Policy Effectiveness in China: Evidence from a FAVAR
Model. Journal of International Money and Finance, 49, pp10.
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