Battery industry giants are increasingly betting on sodium-based technology, a development that could mark a significant shift in the crucial sector for energy transition. Sodium, commonly found in rock salts and brines globally, offers a more affordable and abundant alternative to lithium, the current cornerstone of battery technology. Despite similarities in chemical and structural properties, sodium has not yet been widely adopted, primarily due to lithium cells’ superior range and performance.
This trend may be changing. Recently, Northvolt of Sweden announced a technological breakthrough, and Chinese EV maker BYD Co confirmed plans to construct a $1.4 billion sodium-ion battery plant. Furthermore, China’s CATL stated in April that it would start using sodium-based batteries in some vehicles this year.
According to Rory McNulty, a senior research analyst at Benchmark Mineral Intelligence, this represents a significant investment and a vote of confidence in scaling up this technology for commercialization.
If sodium-ion batteries prove successful, they could reduce the reliance on lithium. This shift highlights the challenges in predicting metal usage in a constantly evolving industry as companies seek more cost-effective and efficient solutions.
Sodium-ion batteries are particularly promising for smaller, shorter-range EVs and power-grid energy storage due to their lower energy density, which is less of a constraint in these applications.
According to a report by Mining Weekly, BloombergNEF predicts that sodium could reduce lithium demand by about 272,000 tons by 2035, or over one million tons if lithium supplies fall short.
The evolving battery metal mix has significantly impacted supply-demand dynamics and pricing. Metals like cobalt and nickel, once projected to face long-term shortages, have seen demand estimates revised due to advancements in battery technology that eliminate their need.
Lithium prices, which skyrocketed last year, have recently dropped due to a mismatch in EV demand and improved supply prospects. This volatility has driven battery firms to consider sodium as a viable, cost-effective alternative.
Sodium still offers a cheaper option, even with the recent dip in lithium prices. Its growth trajectory could mirror that of lithium-ion phosphate (LFP) cells, which gained popularity due to their lower cost despite lower performance.
The primary advantage of sodium lies in electricity grid storage, where cost outweighs performance considerations. However, the success of sodium technology also hinges on improving the cycle life of the cells, with sodium currently averaging 5,000 cycles compared to 7,500 for the most cost-effective lithium products.
Chinese producers, who dominate lithium battery production due to their large-scale operations, are poised to lead in the developing sodium-based cell sector. This scale gives them a competitive edge over European and American manufacturers, who have less experience in mass-scale sodium or lithium battery production.
As the world shifts away from fossil fuels, the role of sodium-ion batteries in energy storage and the broader energy transition is becoming increasingly evident.
