As we enter a new era of electrification the question of “Where is battery tech going next?” becomes increasingly pertinent. With advancements in materials science and engineering, the future of battery technology promises enhanced performance, safety and sustainability, potentially revolutionizing fast-growing sectors, from passenger EVs and grid storage to other forms of transportation such as airplanes and ships.
This article is the second part of a three-part series exploring a selection of the most relevant cutting-edge battery technologies on the horizon, their potential impacts on the lithium-ion incumbent, and the timeline for their development and commercialization.
You can find first article in the series on solid-state batteries and current challenges facing Li-ion batteries here.
What makes sodium-ion batteries different?
Sodium-ion and lithium-ion batteries use the same electrochemical principles, just with sodium replacing lithium in the battery. While different cathodes, anodes and electrolytes must be used to facilitate this “simple” replacement, there are still many chemical similarities between the two batteries’ materials.
The biggest material difference between sodium- and lithium-ion batteries is in the cathode, but there are still sodium-based chemical equivalents to NMC (Nickel Manganese Cobalt) and LFP (Lithium Iron Phosphate) cathodes in development by major players (more on them later). The three primary types of cathode materials in development are transition metal oxides (similar chemical structure as NMC), polyanions (similar chemical structure as LFP) and Prussian blue analogs (unique to sodium-ion batteries).
Of these three cathodes, transition metal oxides and Prussian blue analogs are the most popular choices due to their low cost and lack of rare earth metals. Transition metal oxides commonly contain sodium, oxygen, nickel, iron and manganese, crucially removing the cobalt which has plagued their lithium-ion counterparts’ ESG. blue analogs are a rhombohedral cathode structure unique to sodium-ion batteries and only contain sodium, iron, carbon and nitrogen.
Sodium-ion battery anodes and electrolytes are very similar to their lithium-ion counterparts. Hard carbon anodes, which were used in previous generation lithium-ion batteries, are most used as sodium-ions are too large to be intercalated* into graphite. Electrolytes are composed of the same basic salts and solvents, with sodium-ions replacing lithium-ions, (for example, a common electrolyte is NaPF6 in a carbonate solvent).
What challenges do sodium-ion batteries face?
For batteries, there are four key factors influencing their widespread adoption: energy density, cycle life, cost and safety (power can be another key factor for specific applications, but sodium-ion batteries are not likely to compete in high-power applications).
Energy density is a key challenge for sodium-ion batteries and a current improvement focus area. First generation sodium-ion cells reach energy densities ~160 Wh/kg, with players announcing the potential for 25% improvement in the second-generation. [1,2] First- and second-generation sodium-ion cells will be competitive with mid- (~150 Wh/kg) and high-tier (~190 Wh/kg) LFP, respectively, and have the long-term potential to replace LFP. But sodium-ion are unlikely to reach the lofty 300 Wh/kg target of high-nickel NMC and NCA (Nickel Cobalt Aluminum) batteries due to the increased size and weight of sodium compared to lithium (23 g/mol compared to 6.9 g/mol), which limits achievable energy density.
While cycle life has reached the necessary breakpoint (~3,000 cycles) for mid- and low-performance EVs, it is yet to reach the up to 10,000 cycle life of LFP that BESS, especially utility-scale, often demands. Due to the large size of sodium-ions, their intercalation into the cathode and anode results in increased mechanical stress and faster degradation. As sodium-ion cathode and anode materials improve in the future, cycle life improvements are expected to help the economic viability of sodium-ion batteries for BESS.
The potential for lower costs than lithium-ion batteries is still yet to be realized, despite strong potential due to the abundance and low processing cost of sodium. CATL has quoted 77 $/kWh for their first-generation sodium-ion battery cells and 40 $/kWh for the second-generation. [3] This was met with enthusiasm during the lithium supply chain crunch in 2022 and early 2023, but as Chinese manufacturers have cut LFP cell prices this year down to ~47 $/kWh, [4] the potential cost advantage of sodium-ion will not be realized without technology improvements and greater supply chain economies of scale and/or increased lithium prices.
Sodium-ion batteries have improved safety compared to lithium-ion batteries. They can be fully discharged for transport, reducing safety risk, and have improved thermal stability at high operating temperatures. Consequently, sodium-ion’s safety characteristics represent an opportunity for increased adoption and reduced transport costs compared to lithium-ion.
Why could sodium-ion batteries be better than lithium-ion?
Some of the key benefits of sodium-ion batteries lie in their similarities to lithium-ion. Because sodium- and lithium-ion batteries use similar materials, the sodium-ion supply chain can leverage existing capabilities and knowledge to avoid starting from zero. Similarly, because sodium-ion batteries operate on the same electrochemical principles as lithium-ion, they can be manufactured with same production equipment, reducing the barrier to commercialization compared to other novel battery chemistries (although this doesn’t remove the significant scale-up challenges involved when manufacturing a new type of battery including high scrap rates and low throughput).
Additionally, sodium-ion batteries have several advantages compared to lithium-ion. Sodium is extremely abundant and geographically dispersed, providing strong potential for cost reduction and supply chain security. The safety benefits of sodium-ion batteries may also drive earlier adoption by safety-conscious industries (for example, e-buses and maritime) and could potentially enable the use of sodium-ion batteries in applications where safety is critical, including the stationary storage industry whose stakeholders have become more sensitive to safety issues after recent fires. [5]
Lastly, sodium-ion batteries perform much better at cold temperatures (<0°C) and have greater high-temperature thermal stability than lithium-ion batteries, which may make them a particularly attractive technology in more extreme climates including Australia, the Northern US and MENA.
Sodium-ion batteries are particularly attractive for applications where cost and safety are paramount and there is less focus on energy density and cycle life. Currently, the most viable applications are in e-mobility, starting with low- and mid-performance EVs; CATL’s first use of their sodium-ion batteries was to create mixed LFP/sodium-ion battery packs for EVs. [1] Consumer electronics adoption to replace LCO and LMO is also expected, but no sodium-ion players currently manufacture consumer electronics batteries. As cycle life improves, sodium-ion batteries will also become viable for all energy storage applications up to ~10 hours energy storage applications, complementing or even replacing LFP.
Key players to know
Unsurprisingly, the two players who are furthest in sodium-ion commercialization are the two largest lithium-ion cell manufacturers in the world, CATL and BYD. Both began mass production of sodium-ion batteries in 2023 and have begun using them for EV battery packs. There are also several smaller players across the globe that are also developing the technology. Great Power and HiNA Battery are two Chinese cell manufacturers that have already introduced sodium-ion BESS products and have EV products on the horizon.
Western startups are also active in the space, including Faradion (acquired in 2021 by Reliance Industries for £125m), Tiamat (who recently closed a €22m funding round from Arkema and Stellantis Ventures among others), Altris (working in partnership with Northvolt) and Natron Energy** (whose investors include ABB, Chevron Ventures and Volta Energy Technologies). While production is still lagging behind Chinese players, Western players are beginning to reach key milestones, led by Natron Energy who has recently commissioned its first commercial production facility in Michigan. [6]
Apricum’s takeaway
Sodium-ion batteries are already here, and the future is only looking brighter. Already competitive with some LFP batteries for e-mobility applications, viability for other applications will only increase as energy density and cycle life challenges are solved. Key for stationary storage adoption, use in e-mobility enables sodium-ion batteries to benefit from the same economies of scale and resource investment that lithium-ion batteries have leveraged to make them the dominant electrochemical energy storage technology.
Apricum expects sodium-ion batteries to reach commercial viability for stationary storage by the end of the decade, providing developers with a safer and potentially cheaper alternative to lithium-ion BESS. Sodium-ion could then act as a “pressure valve” for lithium raw materials price hikes, contributing to ever decreasing battery prices and thereby accelerate competitive energy storage deployment.
Summary
Sodium-ion batteries are the most mature alternative to lithium-ion batteries in the market, already reaching some level of mass production and being used in mainstream e-mobility applications in China. Performance is already at a commercial level, with future improvements focused on improving energy density and cycle life to become a potential replacement for LFP. Additionally, similarities to lithium-ion batteries gives sodium-ion an advantage in terms of supply chain and manufacturing scale-up compared to many other future battery technologies.
How Apricum can help
Apricum is a strategy consulting and investment banking boutique exclusively focused on renewable energy and cleantech. We have exceptional experience and knowledge across the battery and energy storage value chains. Our unique blend of strategy consulting and transaction advisory helps clients with both direction and execution. Over 14 years we have delivered over 350 successful projects in 30 countries.
We offer a complete spectrum of services in strategy consulting from technology assessment, market screening, value chain analysis, business model development, and due diligence to investment banking (corporate and asset M&A, debt and equity fundraising, and corporate finance). If you would like to learn more about how we can support your company in entering or expanding your activities in the energy storage, please contact Partner Florian Mayr.
[1] https://www.catl.com/en/news/665.html</”a>
[2] https://faradion.co.uk/technology-benefits/strong-performance/
[3] https://cleantechnica.com/2021/07/30/catl-reveals-sodium-ion-battery-with-160-wh-kg-energy-density/
[4] https://www.infolink-group.com/energy-article/energy-storage-topic-lithium-spot-price-lithium-price-declines-continued-while-cell-prices-stabilize
[5] https://www.energy-storage.news/californias-san-diego-county-votes-to-adopt-bess-standards-following-recent-battery-fires/
[6] https://www.energy-storage.news/natron-energy-starts-manufacturing-50000-cycle-life-sodium-ion-batteries-at-michigan-factory/
* Intercalation is the reversible insertion of a molecule or ion into the layered materials. In sodium- and lithium-ion batteries, intercalation occurs at both the anode and cathode to store ions from the electrolyte.
** Natron Energy is developing an aqueous sodium-ion battery that differs from the exact materials and performance described in this article.
