BriefCASE: Sodium-ion batteries to unseat lithium? Na, but they’ll be worth their salt

The automotive industry has been searching for a cheaper, more
sustainable alternative to lithium-ion batteries. While
experimenting with several cathode chemistries, including
iron-based lithium-ion batteries in low-end models and variants,
the industry has also been working on sodium-ion batteries.

Although iron-based lithium-ion (Li-ion) batteries such as
lithium iron phosphate (LFP) and lithium manganese iron phosphate
(LMFP) are cheaper, they are unable to fully resolve all supply
chain issues, which is where sodium-ion batteries come in. Sodium
is nearly 400 times more abundant than lithium, making its
procurement much easier.

Last year was a particularly moving year for sodium-ion battery
technology in the automotive segment, with several big-ticket
announcements, which have continued into 2024. Some of the
companies that made a move toward sodium-ion batteries include
mainland Chinese automakers BYD, Anhui Jianghuai Automobile, and
Jiangxi Jiangling Group New Energy Vehicle.

In April 2023, Contemporary Amperex Technology (CATL) announced
that Chery Automobile became the first customer for its sodium-ion
batteries. CATL unveiled its internally developed sodium-ion
batteries in July 2021. While CATL's first-generation sodium-ion
battery had an energy density of 160 watt-hours per kilogram
(Wh/kg), the battery maker's next-generation sodium-ion battery
energy density will exceed 200 Wh/kg.

However, we are now witnessing non-mainland Chinese players
entering the fray. Stellantis and Northvolt recently announced
their move toward sodium-ion battery technology.

The technology today

Until recently, sodium-ion batteries were thought to be suited
only for energy storage systems or the two-wheeler segment, where
performance requirements are not too high. Although these segments
will be where sodium-ion batteries are primarily used, recent
developments suggest that sodium-ion batteries can cater to a niche
segment within the light-vehicle segment, especially intracity
micro cars.

Sodium-ion batteries will probably be an alternative to LFP
batteries, given their closely matched energy density figures.
Sodium-ion batteries offer energy density of approximately 160
Wh/kg, compared with about 200 Wh/kg offered by LFP batteries. This
low energy density, combined with a lower life cycle, is a big
disadvantage that could keep sodium-ion batteries confined to
low-cost, entry-level cars.

However, there are several factors that could prove to be
catalysts for higher adoption of sodium-ion cells in the
light-vehicle segment. In terms of technology, sodium-ion batteries
are much safer, less reactive than lithium and able to operate more
efficiently over a wider temperature range, offering comparatively
good performance at lower temperatures.

Sodium-ion cells are much cheaper to manufacture than Li-ion
batteries. According to S&P Global Mobility research, the cost
of manufacturing sodium-ion cells is about $50/kWh, compared with
$70/kWh for Li-ion batteries. The cell manufacturing process for
sodium-ion cells is also almost identical to that of Li-ion cells.
This means heavy investments would not be required if any supplier
decides to switch from Li-ion cells to sodium-ion.

Outlook

It is highly likely that the use of sodium-ion batteries in the
light-vehicle segment will be limited in the short to medium term.
According to an S&P Global Mobility forecast, the share of
sodium-ion batteries in the light-vehicle segment could reach about
3% in 2030 globally. In mainland China, sodium-ion batteries will
have about a 5.5% share in the light-vehicle segment, whereas in
Europe, the battery type could have a share of about 2%. However,
if the prices of Li-ion batteries remain at higher levels, the
global share of sodium-ion batteries, in the best-case scenario,
could increase to about 5% by 2030.

Sodium-ion batteries are already seen as more cost-effective,
safer, less susceptible to supply chain disruptions, and more
environmentally friendly to produce. With suppliers claiming that
their next-generation sodium-ion batteries will have the same
energy density as LFP at 200 Wh/kg, sodium-ion batteries will start
making a lot more sense for use in cars, even in the mid-level car
segment. The possibility of reducing dependency on mainland China
for processed raw materials will certainly work as an added
incentive for the industry to consider sodium-ion.

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