It’s a mistake to assume the materials we use for batteries, magnets, and other high tech applications today, will still be the standard in 10 years. Batteries are a classic lesson in the impacts of technology on commodities.
It’s been said, the cure for high prices, is high prices. Never more true than today.
Battery giants are starting to put their money on new sodium-based technology, a sign that there could be yet another shakeup in the industry that’s crucial for the energy transition.
Sodium — found in rock salts and brines around the globe — has the potential to make inroads into energy storage and electric vehiclesbecause it’s cheaper and far more abundant than lithium, which currently dominates batteries. But while chemically and structurally similar, sodium has yet to be used on a large scale, partly due to the better range and performance of similarly sized lithium cells.
That could be about to change. In the past week, Sweden’s Northvolt AB said it 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 already said in April that its sodium-based batteries will be used in some vehicles from this year.
“It’s serious investment,” said Rory McNulty, senior research analyst at Benchmark Mineral Intelligence. “It’s creating a confidence boost with them saying we are here to continue scaling capacity to commercialize this technology.”
If sodium products do prove successful, they could curb lithiumconsumption. It’s also a reminder of the perils of trying to forecast metals usage in a constantly evolving industry as companies seek cheaper and more efficient cells.
While sodium-ion batteries’ low energy density means they’re unsuitable for larger EVs, they could increasingly be used instead of lithium in lower-end, shorter-range vehicles — or for power-grid energy storage, where size isn’t such an issue.
BloombergNEF has said that sodium should cut about 272,000 tons of lithium demand by 2035, or more than 1 million tons if lithium supplies can’t meet usage.
Changes in the metals mix in batteries has upended supply-and-demand outlooks and whipsawed prices. Cobalt and nickel — which just a few years ago were seen facing long-term shortages — have had 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 through last year — a spike that prompted battery firms to look at sodium as a cheaper alternative — before plunging as EV demand disappointed and supply prospects improved.
“Sodium-ion will have a part to play in improving the lithium supply-demand balance,” said Sam Adham, head of battery materials at consultancy CRU Group. “It will dampen those really severe swings in lithium prices.”
The first generation sodium ion are a bit cheaper than LFP but the volumes will not be worldchanging. However, the second generation sodium ion could reach $40 per kWh. Iron LFP batteries could get to $50/kWh with really high volume and efficiency at the cell level. The future low price of sodium ion would make for insanely cheap fixed storage products like the Tesla Megapack and Powerwalls.
They also do not have practical material limits. There is no shortage of salt or soda ash. The United States has about 90% of the world’s readily mined reserves of soda ash. Wyoming has 47 billion tons of mineable soda ash in the Green River basin. There would be hundreds of TWH of power storage from each billion tons of soda ash.
Based on material costs of $4 per kWh there could be $8 to $10 per kWh sodium ion batteries in the future. This would be ten times cheaper than energy storage batteries today.
Something else to watch is the margins: As batteries or other tech gets cheaper, the investors seeking high returns move on to other domains (maybe genetic medicine, new exotic materials, whatever), and the boring mainstream standard businesses take over.