China LFP Supply Deal Between Wanrun and CATL Secures 1.32 Million Tonnes

Wanrun

China LFP supply deal reached historic proportions as Hubei Wanrun New Energy Technology signed a five-year agreement to deliver 1.32 million tonnes of lithium-iron-phosphate cathode materials to CATL. The massive China LFP supply contract from May 2025 through May 2030 represents one of the largest battery materials procurement agreements in the industry, highlighting CATL's aggressive expansion strategy and LFP technology's growing market dominance.

Strategic Partnership Drives Battery Technology Innovation

China LFP supply partnership extends beyond simple procurement to encompass joint research and development initiatives. Wanrun and CATL agreed to collaborate on high-density LFP product iteration and mass production capabilities while jointly exploring new energy market opportunities. CATL committed to purchasing at least 80% of promised monthly quantities, providing Wanrun with guaranteed revenue streams and production planning certainty.

Meanwhile, Wanrun demonstrated strong operational performance with 2024 LFP production reaching 233,108 tonnes, representing 51% growth from 2023. Sales volumes increased 39% to 228,240 tonnes during the same period, reflecting robust market demand and the company's expanding manufacturing capabilities. This performance trajectory supports the substantial supply commitments made to CATL.

CATL's Market Leadership Drives Demand Growth

However, CATL's explosive growth trajectory necessitates secured raw material supplies for sustained market expansion. The battery giant sold 120 GWh of batteries in Q1 2025, marking 30% year-over-year growth and reinforcing its position as China's largest battery producer. CATL raised $4.6 billion through Hong Kong Stock Exchange share sales on May 20th, specifically targeting global battery market expansion financing.

Therefore, the Wanrun supply agreement aligns perfectly with CATL's international growth strategy and capital deployment plans. The five-year commitment provides production stability while supporting CATL's aggressive capacity expansion across multiple global markets. This strategic partnership model demonstrates how Chinese battery companies integrate vertically to secure critical material supplies.

LFP Technology Gains Global Market Share

Furthermore, lithium-iron-phosphate batteries captured nearly half of the global electric vehicle battery market in 2024 according to the International Energy Agency. LFP technology offers significant advantages including lower manufacturing costs and enhanced safety performance compared to ternary battery alternatives. These benefits drive increasing adoption across automotive manufacturers seeking cost-effective energy storage solutions.

As a result, the Wanrun-CATL partnership positions both companies advantageously within the rapidly expanding LFP segment. China's dominance in LFP production creates competitive advantages for domestic battery manufacturers while supporting the country's electric vehicle industry leadership. The supply agreement reinforces China's integrated approach to battery supply chain control from raw materials through finished products.

The Metalnomist Commentary

The Wanrun-CATL supply agreement exemplifies China's systematic approach to battery supply chain integration, securing critical materials access while driving technology innovation through strategic partnerships. This 1.32 million tonne commitment reflects both companies' confidence in LFP technology's long-term market prospects and China's continued dominance in global battery manufacturing despite increasing international competition.

Wanrun’s Bold Move: Building LFP Battery Plant in the U.S. Amid Geopolitical Strains

China’s Hubei Wanrun New Energy Technology, a leading producer of lithium-iron-phosphate (LFP) cathode active materials, has announced plans to construct a state-of-the-art production facility in South Carolina, U.S. The project is expected to begin operations in 2028, with an investment totaling $167.6 million and a production capacity of 50,000 tons per year. The construction is anticipated to take 30 months, and the first phase will include a 9,000-ton capacity.

Wanrun has already established a subsidiary, Wrestore Technology, in South Carolina to facilitate the venture. This move aligns with a growing trend among Chinese companies to invest in overseas markets due to mounting geopolitical tensions and restrictions on materials produced in China.

Geopolitical Challenges and Wanrun’s Strategic Expansion

Geopolitical tensions between China and Western nations, coupled with growing material restrictions, have driven Chinese companies to explore opportunities abroad. Wanrun’s expansion into the U.S. market mirrors similar ventures by other major Chinese battery firms, such as EVE Energy, which began constructing an LFP battery plant in Mississippi earlier this year.

Wanrun's shipments of LFP materials increased by 24% year-on-year in the first half of 2023, reaching 78,000 tons. The company’s strong partnerships with industry leaders like CATL, BYD, and Gotion High-Tech position it well for continued growth. In China, LFP batteries dominate the market, with 75% of the production and 74% of the installed volume in August 2023. While lithium-ion battery and electric vehicle manufacturers outside China have traditionally preferred ternary CAM, rising interest in LFP technology suggests that Wanrun’s move may capture significant global market share in the coming years.

As international interest in LFP batteries grows, Wanrun’s U.S. facility could play a pivotal role in expanding the technology’s global footprint.

China’s Hubei Wanrun Launches LFP Battery Production Plant in Shandong

Hubei Wanrun

Hubei Wanrun, a prominent Chinese new energy firm, has officially launched a major production plant for lithium iron phosphate (LFP) and its feedstock iron phosphate in Binzhou city, located in Shandong province. The plant is a significant move to strengthen China’s position as a leading global supplier of materials critical for the electric vehicle (EV) and energy storage industries.

The new facility has a total nameplate capacity of 240,000 tons per year for LFP and an additional 240,000 tons per year for iron phosphate, with a total investment of 6.5 billion yuan (approximately $913 million). The initial phase of the plant has already launched, including 120,000 tons per year of LFP production capacity and the full 240,000 tons per year for iron phosphate. The remaining 120,000 tons per year of LFP capacity is still pending and has yet to be launched.

The project is a joint venture between Wanrun New Energy, a major Chinese producer of LFP cathode materials, holding an 80% stake, and Hubei, a multi-sector Chinese company with a 10% stake. Shenzhen Shijia Enterprise, a well-known export/import firm, holds the remaining 10% stake in the project.

Wanrun New Energy's Role in the Growing LFP Market

Wanrun New Energy has solidified its position as a key player in the global LFP market. In the first half of the year, the company shipped 78,000 tons of LFP, marking a 24% increase from the previous year. Additionally, Wanrun has plans to expand its global footprint with a new LFP production plant in South Carolina, USA, signaling the growing demand for LFP as a key material in the battery manufacturing sector.

In China, LFP batteries continue to dominate the market, making up a 75.6% share of the combined production for both power and energy storage batteries. This dominance is reflected in recent data from the China Automotive Battery Innovation Alliance, showing that LFP batteries accounted for 75.8% of newly installed volumes for power batteries during the period from January to September, totalling 734.4 GWh in production and 246.6 GWh in newly installed volumes.

LFP’s increasing share of the battery market, particularly for electric vehicles and energy storage systems, highlights the growing importance of materials like iron phosphate and lithium iron phosphate in the global energy transition. As demand for cleaner energy and EVs accelerates, the supply of high-quality LFP will become even more critical.