Battery giants are starting to bet on new sodium-based technology, in a sign that there could be another shake-up in an industry that’s crucial to the energy transition.
Sodium – found in rock salts and brines around the world – has the potential to make inroads into energy storage and electric vehicles because it’s cheaper and far more abundant than lithium, which currently dominates batteries. But although chemically and structurally similar, sodium has not yet been used on a large scale, partly because of the better range and performance of similarly sized lithium cells.
That could be about to change. Last week, Sweden’s Northvolt AB said it had made a breakthrough with the technology, while Chinese EV maker BYD Co. signed a deal to build a $1.4 billion sodium-ion battery plant. China’s CATL said in April that its sodium-based batteries would be used in some vehicles from this year.
“It’s a serious investment,” said Rory McNulty, senior research analyst at Benchmark Mineral Intelligence. “It’s a vote of confidence that they are saying we are here to continue to scale up capacity to commercialise this technology.”
If sodium products prove successful, they could curb lithium consumption. It’s also a reminder of the dangers of trying to predict metal consumption in an industry that’s constantly evolving as companies seek cheaper and more efficient cells.
While sodium-ion batteries’ low energy density makes them unsuitable for larger EVs, they could increasingly be used instead of lithium in lower-end, shorter-range vehicles – or to store energy for the power grid, where size isn’t such an issue.
Changes in the metal mix in batteries have upended supply and demand forecasts and sent prices into a tailspin. Cobalt and nickel, which only a few years ago were seen as facing long-term shortages, have seen demand estimates revised by the emergence of cells that don’t use them.
And the potential for big price swings is particularly evident in lithium.
A buying frenzy sent prices soaring last year – a spike that prompted battery companies to look to sodium as a cheaper alternative – before collapsing as EV demand disappointed and supply prospects improved.
“Sodium-ion will play a role in improving the supply-demand balance for lithium,” said Sam Adham, head of battery materials at consultancy CRU Group. “It will dampen these really big swings in lithium prices.”
Even with the recent slump in lithium prices, sodium is still a cheaper option. If the market grows, it could potentially mirror the rise of lithium-ion phosphate (LFP) cells, which have been favoured over more powerful products because of their lower cost.
It’s clearest potential advantage is in storing excess power for grids, something that will become increasingly important as the world moves away from fossil fuels. Here, battery performance is less important than low cost.
Sodium’s success will also depend on improving the cycle life of the cells – how many times they can be charged and discharged before they need to be replaced. Sodium cells currently average 5,000 cycles, compared with around 7,500 for the lowest-cost lithium products.
The big question is whether it can do that, and if it does, there could be more demand from the energy storage sector, says Rystad Energy analyst Duo Fu.
For now, the developing sodium-based cell sector looks set to be dominated by Chinese manufacturers, who control most lithium battery production because of the scale of their operations, which keeps costs down. This should give them an advantage over their European and American rivals.
European and American manufacturers “have far less experience in producing sodium or lithium batteries on a mass scale,” says CRU’s Adham. “They can actually be cost competitive through economies of scale.”
