Establishing a domestic electric vehicle (EV) supply chain has been a key strategic goal for the US in recent years. While the return of President Donald Trump could potentially slow down EV adoption, he shares his predecessor Joe Biden’s affinity for strengthening US manufacturing and local supply. China may have a strong lead in numerous aspects of EV production, but the US aims to become a significant competitor.
Lithium-ion battery supply chains are particularly important for US electrification efforts, and many automakers currently opt for nickel-manganese-cobalt due to its high range and energy density. However, lithium-iron-phosphate (LFP) batteries are gaining popularity for the comparative affordability of their constituent raw materials, as well as high cycle life and low risk of thermal runaway.
Much of the raw materials supply for LFP is concentrated in Asia and controlled primarily by China. As US-based OEMs push to bring cheaper EVs to market, outsourcing materials is only expected to become more challenging because of Trump’s protectionist trade policies. Therefore, a sustainable and local LFP supply chain could prove essential.
Critical compounds
Iron phosphate comprises more than 80% of the cathode in an LFP battery, making onshoring its supply a strategic priority. In November 2024, powder metals supplier GKN Hoeganaes and mineral development company First Phosphate partnered to develop a North American supply chain for LFP active cathode materials. Matthias Voss, Senior Vice President of GKN Hoeganaes, tells Automotive World that there is “no capacity in North America right now, and it is much the same in Europe. The supply chain for this compound really needs to be built from scratch.”
Currently the bulk of iron phosphate production is located in China. Voss notes this places urgency on the US government to act, yet China may not necessarily be able to meet international demand. Given the country’s exponential domestic sales growth—from 8.4 million in 2023 to 12.86 million in 2024—it may soon hit capacity and need to turn to other regions to secure iron phosphate for its own production.
Both GKN and First Phosphate are established players in their respective sides of the supply chain—the former in iron powder and the latter in phosphoric rock. First Phosphate is also working to develop battery-grade phosphoric acid, another important chemical in the LFP cathode. The two companies’ partnership was precipitated by GKN’s successful integration of First Phosphate’s magnetite into its melting process, which led to the development of a high-purity iron powder that could be used in EV batteries. Subsequently, they set their sights on the wider EV supply chain for LFP. “This is going to be a huge global market, but a local supply chain is what everybody’s looking for,” Voss emphasises. “We’re definitely seeing a trend towards LFP among Western OEMs.”
Proprietary processes
The ongoing collaboration has unlocked a series of innovations that could help scale affordable local iron phosphate supply and produce better performing and cheaper materials compared to their overseas competitors. “We developed a means of using the magnetite that helps First Phosphate avoid large amounts of waste material in its own process,” Voss states. He adds that while other global players can generate iron powder, the “devil is in the details.” The biggest challenge is purity, which can have a tangible impact on battery performance.
To this end, GKN has developed a proprietary melting process, wherein molten steel is atomised into irregular and homogeneous particles that are subsequently annealed—a slow cooling process that removes internal stresses and improves malleability—to produce exceptionally high-grade steel powder. This ‘Ancorsteel’ process is already used for a range of purposes in industries like construction. However, by integrating First Phosphate’s magnetite, it could provide a level of purity previously unseen and of superlative importance for the LFP chemistry.
The final piece of the puzzle is developing battery-grade phosphoric acid, which typically requires a purity between 85% and 95%. Voss states that GKN’s innovation centre is actively supporting First Phosphate towards achieving this grade, and the phosphoric acid will be outsourced in the meantime. While continuing to build this production capacity, First Phosphate will begin producing both iron phosphate and LFP in H1 2026.
Circularity
While innovative processes can help give North American suppliers an advantage on quality and cost, consistent availability could prove equally important. For GKN and First Phosphate, this means building out the circular economy. At the time of writing, all of GKN’s iron is sourced and refined from recycled industry scrap. “From day one, our biggest driver was to build out a circular economy for these materials,” remarks Voss. First Phosphate is experimenting with the circular economy through gypsum recycling and intends to pursue options for lithium recovery. As much as 95% of the lithium used in an EV battery can be recovered with contemporary extraction processes.
From day one, our biggest driver was to build out a circular economy for these materials
GKN is also interested in recovering used iron from batteries at the end of their useful life, which Voss characterises as “the second stage of the journey”. Once the required processes are in place, recovery might eventually solve most challenges around procurement. However, it should be noted that while most of the iron can be recovered from a battery, extraction is currently expensive and inefficient compared to mining. “From a chemical or processing standpoint, it is possible,” he notes. “But in terms of the cost, automatic separation and disassembly remain a major challenge.” Accomplishing these in a low-cost manner will prove critical for adoption.
Circularity still commands a premium price tag, which conflicts with the broader ambition for lower EV sticker prices. But time is on the companies’ sides in this regard, as most of the batteries produced so far remain in their first-life applications. EVs may be the future, Voss concludes, but this may only be realised if the battery supply chain can be brought closer to home. By onshoring the LFP chemistry and refining the processes involved in its production, affordability and supply stability become possible. “The industry shouldn’t be dependent on a single region for its precursor materials,” he emphasises. “Unfortunately, we’re already in that situation, so we need to work on getting out of it.”
