Battery giants are starting to invest in new sodium-based technologies, a sign that there could be a new shake-up in the industry, crucial for the energy transition.
Sodium – found in mineral salts and brines around the world – has the potential to make a breakthrough in energy storage and electric vehicles because it is cheaper and much more abundant than lithium, which currently dominates batteries. But although chemically and structurally similar, sodium has not yet been used on a large scale, in part because of the better range and performance of similarly sized lithium batteries.
That could be about to change. Last week, Sweden Northvolt A B said it made a breakthrough with the technology, while the Chinese electric vehicle manufacturer BYD Co. signed a agreement to build a $1.4 billion sodium-ion battery factory. China’s CATL already declared in April that its sodium-based batteries will be used in some vehicles this year.
“It’s a serious investment,” said Rory McNulty, senior research analyst at Benchmark Mineral Intelligence. “It creates a boost of confidence when they say we’re here to continue to increase the capacity to commercialize this technology.”
If sodium products prove effective, they could reduce lithium consumption. It also reminds us of the dangers of forecasting metal usage in an ever-changing industry as companies seek cheaper, more efficient cells.
Although the low energy density of sodium-ion batteries makes them unsuitable for larger electric vehicles, they could increasingly be used in place of lithium in lower-end, shorter-range vehicles – or for energy storage on the power grid, where the size is not so large. a problem.
BloombergNEF has said that sodium is expected to reduce lithium demand by around 272,000 tonnes by 2035, or more than a million tonnes if lithium supplies are insufficient to meet consumption.
Changes in the composition of metals in batteries have upended the supply and demand outlook and sent prices tumbling. Cobalt and nickel – which only a few years ago faced long-term shortages – have had their demand estimates revised due to the emergence of cells that do not use them.
And the potential for wild price swings is particularly evident in the case of lithium.
A purchase frenzy caused prices to skyrocket last year – a rise that prompted battery makers to consider sodium as a cheaper alternative – before plunging as demand for electric vehicles disappointed and supply prospects have improved.
“Sodium-ion will have a role to play in improving the balance between lithium supply and demand,” said Sam Adham, head of battery materials at consultancy CRU Group. “This will smooth out the very severe fluctuations in lithium prices.”
Even with the recent crisis In lithium prices, sodium remains a cheaper option. If the market grows, it could potentially echo the rise of lithium-ion phosphate (LFP) cells, which have been favored over higher-performance products due to their lower cost.
Its most obvious potential benefit is in storing excess electricity for grids, which is becoming increasingly important as the world moves away from fossil fuels. In this case, battery performance is less important than low cost.
Sodium’s success will also depend on improving the life cycle of cells, that is, how many times they can be charged and discharged before needing to be replaced. Sodium batteries currently complete an average of 5,000 cycles, compared to around 7,500 for the most cost-effective lithium products.
The big question is can this be achieved, and if it works, there could be more demand from the Energy storage sector, said Duo Fu, an analyst at Rystad Energy.
For now, the developing sodium-based cell sector appears to be dominated by Chinese producers, who control the bulk of lithium battery production due to the large scale of their operations that helps keep costs down at a low level. This should give them an advantage over their European and American rivals.
European and American manufacturers “have much less experience producing sodium or lithium batteries on a large scale,” said CRU’s Adham. “In reality, you can be cost competitive through economies of scale. »
