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Batteries are the most expensive component of electric vehicles, and the recent supply issues of lithium has left manufacturers worried about the impact on sales as customers bear the higher costs. EV batteries have long been plagued by the shortage of raw materials, and a new alternative is using sodium-based batteries, a new technology but more reliable than lithium.
“Compared to the extensively-used lithium-ion (Li-ion) cells, Na-ion cells have a lower energy density and cycle life but perform better in a wide operational temperature range and are safer. Na-ion cells have a similar working principle to Li-ion cells and are expected to be at least 20% cheaper than LFP due to their lithium-free nature. However, separator and electrolyte costs could be significant and result in Na-ion being more costly,” says Wood Mackenzie.
Spot prices of lithium carbonate in China have more than tripled since 2020 and are now rising again after some consolidation earlier this year.
However, there are various challenges with sodium-ion batteries as the market is still nascent. There is a lack of well-established supply chains, the technology is still nascent and very few companies are operating in this segment, there are limitations with EV battery form factor and sodium-ion batteries have less storage capacity when compared to lithium.
However, these issues are offset by the vast availability of sodium, more environment friendly, cheaper and better operating performance compared to lithium-ion batteries.
EV batteries in Asia
Asia is a frontrunner in the global battery sector, with some of the world’s largest battery makers having base in the region. China’s CATL and BYD together make up more than 50% of the global battery market. As per data by SNE Research, companies from China, Japan and Korea are dominating the global market.
Within the sodium-ion battery segment, some of the leaders are China’s CATL, HiNa Battery Technology, Ronbay Technology, Zoolnasm, Natrium, BYD, Japan’s Kishida Chemical, Panasonic, and Mitsubishi Chemical.
CATL and BYD have plans to start mass-producing sodium-ion EV batteries this year. Chinese brand iCAR will be the first to use CATL’s sodium-ion battery. BYD’s upcoming model Seagull will carry a sodium-ion battery.
Among the two leaders, CATL is using a mix of sodium and lithium for its batteries, which is called the AB battery system integration technology. This is to increase the energy density of the EV batteries.
Consulting firm Benchmark Minerals tells The New York Times that of the 20 sodium battery factories planned around the world, 16 are in China. In the next two years, China will have nearly 95% of the total global capacity for sodium-ion batteries.
“Na-ion (sodium) batteries are expected to replace some of the LFP (lithium) shares in passenger EVs and energy storage, reaching 20 GWh by 2030. The cost saving is incredible: the production of 1 GWh Na-ion cells will save 41% of the material expense compared with LFP cells,” adds Wood Mackenzie.
