Battery giants are starting to pour money into new sodium-based battery technology, a sign that the industry could be on the verge of another transformation critical to the energy transition. Sodium, found in rock salt and brine around the world, has the potential to make inroads into energy storage and electric vehicles because it is cheaper and far more abundant than lithium, which currently dominates battery raw materials. But despite the chemical and structural similarities between the two, sodium batteries have not yet been used on a large scale, in part because lithium batteries of the same size have better performance.
However, this situation may be about to change: industry giants are beginning to bring capital to the market.
Over the past week, Swedish battery developer and manufacturer Northvolt AB said it had made a breakthrough in the technology and planned to provide customers with sodium-ion battery samples next year and achieve mass production by 2030. Chinese electric vehicle manufacturer BYD also signed an agreement this month to invest 10 billion yuan to build a sodium-ion battery project with an annual production capacity of 30GWh in Jiangsu, with the goal of becoming the world's largest sodium-ion battery system supplier for mini-cars.
In April this year, CATL said that starting this year, its sodium-based batteries will be used in some cars.
Rory McNulty, senior research analyst at Benchmark Mineral Intelligence, a professional information provider, said: Their investment is not just in research and development, but more to continue to expand production capacity and commercialize this technology, which enhances people's confidence.
If sodium batteries do prove successful, they could curb lithium consumption. It's also a reminder that in an evolving industry, trying to predict future usage of metals is risky as companies seek cheaper, more efficient batteries.
While the low energy density of sodium-ion batteries means they are unsuitable for large electric vehicles, they could increasingly replace lithium batteries in low-end, short-range vehicles, or for grid energy storage, where battery size is not an issue.
Data shows that by 2035, sodium will replace approximately 272,000 tons of lithium demand. If lithium supply cannot meet demand, the substitution effect will further expand to more than 1 million tons.
It’s important to note that changes in the structure of metals in batteries can often upend the supply and demand outlook and send prices into wild swings. For example, demand estimates for cobalt and nickel, which just a few years ago were thought to be facing chronic shortages, have been revised due to the emergence of batteries that do not use these elements, such as lithium iron phosphate batteries.
The possibility of significant fluctuations in lithium prices is particularly obvious. A buying frenzy sent lithium prices soaring last year, only to start plunging as demand for electric vehicles slumped and supply prospects improved. The wave of price increases has also prompted battery companies to consider sodium as a cheaper alternative.
Sam Adham, director of battery materials at consulting firm CRUGroup, said: "Sodium-ion batteries will play a role in improving the balance of lithium supply and demand. This will curb the really sharp fluctuations in lithium prices."
The most obvious potential advantage of sodium batteries is their ability to store excess power for the grid, which will become increasingly important as the world moves away from fossil fuels. In this segment, battery performance is not as important as low cost.
Finally, the success of sodium batteries will also depend on improving the battery's cycle life. It is reported that sodium batteries can currently be cycled an average of 5,000 times, while the most cost-effective lithium battery products are about 7,500 times.
Duo Fu, an analyst at Rystadenergy, said that the biggest question is whether it can achieve long life. If it is successful, there may be more demand in the energy storage industry.