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. |
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.