The initial purchase cost of lithium iron phosphate (LiFePO4) batteries is approximately 200% higher than that of lead-acid batteries (taking the 100Ah specification as an example: LiFePO4 is priced at ¥3000, while lead-acid is only ¥1000), but it has a significant economic advantage throughout its life cycle. According to CATL’s estimation in 2023, the cycle life of LiFePO4 reaches 6,000 times (500 times for lead-acid batteries), and in terms of cost of electricity per kilowatt-hour (LCOE), it is only ¥0.5/kWh, which is 76% lower than the ¥2.1/kWh of lead-acid batteries. Tesla’s energy storage project demonstration: The Powerwall home LiFePO4 system was replaced 0.3 times in 10 years of use (the lead-acid system needed to be replaced 4.2 times), and the total maintenance cost decreased by 68%.
The improvement of operational efficiency creates direct benefits. LiFePO4 supports 1C fast charging (reaching 80% in 30 minutes), with a charging efficiency of 95% (70% for lead-acid batteries at 0.2C), and an energy recovery rate increase of 36%. Data from the German forklift manufacturer Still GmbH shows that after the logistics warehouse switched to LiFePO4, the effective operating time of the equipment increased from 14 hours per day to 22 hours per day, the production capacity increased by 31%, and the electricity cost decreased by ¥18,000 per unit per year. The case of an Amazon warehouse in the United States shows that lead-acid forklifts need 40 minutes for battery swapping per shift, while LiFePO4 uses lunchtime for fast charging, saving up to 240 working hours per unit annually, which is equivalent to an additional income of ¥65,000.
Safety and environmental compliance reduce hidden costs. The thermal runaway temperature of LiFePO4 can reach as high as 270℃ (hydrogen evolution at 60℃ for lead-acid batteries), and the probability of thermal accidents is only 0.002‰ (1.7‰ for lead-acid batteries). The EU’s “New Battery Act” in 2024 mandates a lead recovery rate of at least 80%, increasing the hidden cost of lead-acid batteries by ¥0.8 per Ah. California’s AB-1509 Act imposes an ecological tax of ¥450 per kilogram on lead-containing batteries, resulting in an additional cost of ¥2100 for a 100Ah lead-acid battery. The report of BYD’s energy storage project indicates that after the LiFePO4 system passed the UL 1973 certification, the insurance cost was reduced by 43%.
Low-temperature performance reduces investment in environmental adaptation. The capacity retention rate of lifepo4 at -20℃ is 85% (while that of lead-acid is only 35%). The Norwegian Arctic Circle Communication base station project shows that lead-acid battery packs require a heating system with a power proportion of 15% (an additional power consumption of ¥12,000 per year for every 100kWh), while lifepo4 only needs 3% of the preheating power consumption. The operating cost in cold regions has decreased by ¥96,000 per decade. Data from Northvolt in Sweden has confirmed that polar research stations using LiFePO4 have reduced the thickness of insulation materials in battery cabins by 60% and increased space utilization by 40%.
Residual value recovery gain compensates for the price difference. After 3,000 cycles, the capacity retention rate of LiFePO4 is 80%, and the residual value rate in the second-hand market reaches 45% (the residual value rate of lead-acid batteries is only 5% after 500 cycles). The 2023 Bloomberg New Energy Finance report indicates that the recycling value of a 1MWh LiFePO4 energy storage system after ten years is ¥180,000 (including the recycling of lithium, phosphorus, and iron metals), while the recycling value of a lead-acid system is only ¥35,000 and includes a hazardous waste treatment fee of ¥82,000. China Tower Corporation’s tender shows that the LiFePO4 base station battery for secondary use (with capacity reduced to 70%) was still sold at ¥0.8/Ah, which is 37% lower than that of new lead-acid batteries.
Market trends verify long-term returns. In 2023, the price of LiFePO4 cells dropped to 98/kWh (580/kWh in 2015), while the price of lead-acid batteries decreased by only 23% during the same period. Goldman Sachs predicts that by 2025, the penetration rate of LiFePO4 in the industrial battery sector will reach 78%, and the scale effect will further reduce costs by 33%. Tesla Megapack energy storage power station calculations show that in areas where the peak-valley electricity price difference is ¥0.9/kWh, the net income from a single charge and discharge of the LiFePO4 system is ¥0.74/kWh, and the payback period is shortened to 4.1 years (9.7 years for the lead-acid solution).