The future is electric. Everything from cars, to
consumer electronics to renewable energy storage is
dependent on our ability to build more and better
batteries. Today, lithium-ion
batteries dominate those markets, but demand for the
critical minerals needed to make lithium-ion batteries
is predicted to outstrip supply. That, combined with
cost considerations and concerns over energy
security, are leading companies and countries to
consider alternative battery chemistries. With challenges around, say,
lithium, nickel, cobalt supply, some OEMs have
turned to sodium ion. Sodium-ion batteries have a
similar design to lithium-ion batteries,
which means the two can be manufactured using similar
methods. Both generate electricity
through a chemical reaction and are made up of an
anode, cathode, separator and an electrolyte. But in
a sodium-ion battery, lithium ions are replaced
with sodium ions in the battery's cathode, and
lithium salts swapped for sodium salts in the
electrolyte. Like lithium, sodium, which is part of
salt, needs to be chemically processed before it can
become the feedstock that goes into the cathode and
electrolyte. Sodium is right by lithium
on the periodic table, which means that the two are
chemically very similar, but sodium is much more
abundant. It's also cheaper. Although still in its
infancy, the market for sodium-ion batteries is
expected to be worth over $11 billion by 2033. While sodium-ion batteries
can't compete with lithium-ion batteries in
terms of range in electric vehicles, they do present
some unique advantages. It doesn't use the expensive
raw materials. There's no cobalt, there's
no copper, there's no lithium, there's no
graphite, which is really primarily controlled by
China today. What we're actually going to
see is a production Natron battery cell that's been
fully charged. And actually we're going to
drill straight through it with a hole saw. And what we're going to
find is it's just going to sit there. You know,
there's no safety hazard. There's no fire. Chinese battery giant, CATL,
recently announced that it would supply automaker,
Chery, with sodium-ion batteries for its EVs. Other battery companies
like SVOLT and French-based startup Tiamat are pursuing
similar technology. CNBC spoke to two companies,
California-based Natron Energy and UK-based
Faradian about their plans to commercialize sodium-ion
batteries and the technology's place in the
evolving battery market. Sodium-ion batteries have
been around since about the 1970s and 80 seconds, but
large-scale development of the technology was
abandoned in favor of lithium-ion batteries. But now, the technology is
getting a second look. Excitement around
sodium-ion batteries was reignited after the world's
largest EV battery maker, CATL, revealed it was
investing in the technology in 2021, with plans to
establish a basic industrial supply chain by 2023. Similar to lithium-ion
batteries, sodium-ion battery cathodes can be
made of different materials, which companies are
experimenting with to give their batteries specific
properties. But overall, the materials used to make
sodium-ion batteries tend to be cheaper than the
materials used in lithium-ion batteries. This cell, about 80% of the
cost of the cell is the materials. And if you
compare it with the bill of materials for lithium, in
volume, you're looking at between 24 to 32% less
expensive for the bill of materials for sodium ion
compared to lithium ion. Besides doing away with
lithium, sodium-ion batteries do not require
the use of other critical materials like cobalt,
which has been associated with human rights abuses. Plus, sodium can be found
anywhere. It's hugely abundant. It's not just widely
available in terms of the current sources of sodium
in sea salt, but it's contained in the crust of
the earth around the world as well. Lithium, the
majority of that is within basically three countries,
Australia, China and Chile, and developing to be a
handful of more countries, but still hugely
concentrated. 70 or so percent of the current
cobalt production is in the Democratic Republic of
Congo. And again, the vast
majority of that is being refined in China. So so
these are obviously key bottlenecks in terms of the
supply chain. Another draw of sodium-ion
batteries is that they have a longer cycle life,
meaning that the battery can be charged and discharged
more times than lithium-ion batteries and can operate
in a wider range of temperatures. With sodium-ion batteries we
have a very wide temperature operating range. So down to -30 and all the
way up to plus 60. We've demonstrated
capability to go up to plus 80 degrees C as well. And that again is because
of the intrinsic elements of the electrolyte and the
materials that we're able to use. Battery fires have also been
an issue that's dogged lithium-ion technology, but
experts say sodium-ion batteries will be much
safer. Lithium ion, you always need
to have 30 to 40% charge in a battery. That's why when
you get on a plane and they ask you to take out your
batteries, if you're going to check in a bag, it's for
those reasons because they can become unstable and
catch fire. And sodium ion is very
unique in that way that we can ship these at zero
volts. So it's like essentially
shipping a bag of electrolyte, not an active
battery. For all of its advantages,
the Achilles heel of sodium-ion technology has
been its energy density, which is the amount of
electrical power a battery can store with respect to
its mass. What this means is that in
order to hold the same electrical charge, sodium
batteries need to be bigger and heavier than their
lithium counterparts, which can be a problem for EVs,
where space is limited. Today, sodium-ion batteries
have an energy density similar to that of lithium
iron phosphate batteries. Lithium ion chemistries
containing nickel, manganese and cobalt have the highest
energy densities. These energy densities
translate to range in electric vehicles. Despite its diminished
range, experts say sodium-ion technology has a
promising future and companies are rushing to
ramp up production. One of those companies is
Faradian, which was founded in the UK in 2011. In 2022, Indian
conglomerate Reliance Industries acquired the
startup for $135 Million. Reliance owned captive
demand is massive. They have the largest oil
refinery in the world moving to renewable energy. They have one of the
largest telecom companies in the world with Jio, and
they have one of the largest retail businesses in the
world. So there's all these power
requirements. There's delivery vehicles,
there's telecom applications. The cathode in Faradion's
battery cells is a chemistry known as sodium layered
oxide and contains sodium, nickel, manganese,
magnesium, titanium and oxygen. The anode is made
of hard carbon, which comes from coconut shells or
other biomass materials. Quinn says Faradian is
initially focusing on producing batteries for the
stationary energy storage market. This can include
things like providing backup power for telecom companies
or storing excess energy generated by renewable
resources like wind and solar, either on the grid
scale or in individual homes. Next, Faradion plans
to expand into the low speed electric vehicle market. Think electric bikes,
scooters and rickshaws. Heavy machinery like
forklifts are also a contender for Faradion's
batteries. Faradion installed its
first sodium-ion battery for energy storage in Australia
in 2022. The company says its
batteries are already competitive with lithium
iron phosphate technology. In our production-size cells
they currently are 160 watt hours per kilo. And we've
got development activities that are taking us to 190,
200 plus watt hours per kilo. As it continues to improve
the energy density of its batteries, Faradion does
see a future where it moves into the EV market,
starting with commercial vehicles such as busses and
trucks that have more room to accommodate larger
batteries. EV is a more crowded space. It's a much more
challenging market. It requires a lot more
capital and there's longer design cycles. On the other
hand, you know, because there's so much interest in
our technology, it's certainly important to be
on their roadmap and to be collaborating with some of
those companies because you do want to to be able to
have a seat at the table. The challenge for Faradion
now is scaling up production. The company is
building an R&D facility in the UK to continue
developing its technology, as well as working on
expanding production with factories in India. We're building up pilot
facilities to go into the hundreds of ton range, both
from the material side and cell manufacturing side,
and then also in parallel building up the
gigafactories to be able to go up into the gigawatt
hour scale per year. Natron Energy is another
company trying to commercialize sodium-ion
battery technology. Founded in 2012, in Santa
Clara, California, as a spinoff of Stanford
University, Natron focuses on making sodium-ion
batteries using a sodium-rich material based
on the pigment Prussian blue. Prussian blue is a consumer
product. It's a pigment. You'll find
it in paint, blue jeans, all sorts of things. It turns
out that it's also great at storing energy in the form
of sodium ions. In general, it is a
relatively simple compound to formulate. Any chemical
plants with quality control and process control to make
high-purity material can make Prussian blue. For its battery cells,
Natron uses a sodium material rich in iron for
the cathode and a manganese-rich sodium
material for the anode. The anode and the cathode
electrodes are deposited onto aluminum foil, similar
to what you'd have in your kitchen. The packaging is
made of this laminate material that's aluminum
foil coated with plastic. In between the two
electrodes, we would have some kind of separator and
that separator is effectively plastic wrap
with a little bit of silica. So so glass dust embedded
into the plastic. And that's really about it. Natron has outsourced
production of its electrode material to special
chemical maker Arxada in Switzerland. The company is
continuing its R&D efforts and runs a pilot-scale
production line where it says it can produce between
100 and 200 battery systems per month. One of the advantages of
sodium-ion technology is that it can use the same
manufacturing plants as lithium-ion batteries. Natron is taking advantage
of this, partnering with Clarios to use part of the
lithium-ion battery maker's Michigan plant to begin
large-scale manufacturing of its sodium-ion batteries in
the fall of 2023. The beauty of that specific
plant is it's sort of medium volume. You know, it gives
us an opportunity to prove that we can manufacture
these sodium-ion batteries on lithium-ion lines before
we then go out and build a global-scale plant. But at
some point in 2024, next year, we're going to be
running this plant at a rate of about 3.5 to 4 million
battery cells per year. The company is not initially
focusing on the EV market. Instead, Natron is
targeting the data center market, where it says its
batteries can provide backup power in the case of an
outage. EV fast charging stations are another
possible future market. Natron is already testing
this application with investor Chevron. Imagine pulling into this
station. There are a whole bunch of
chargers there and all the cars plug in at the same
time. And now the power load on the electric grid is
enormous. It can be really hard for
the grid to support all those vehicle charges
simultaneously. And so a lot of station
operators are actually moving to a model where
they would put big stationary batteries in the
station to provide those pulses of power to charge
the vehicles. United Airlines has also
invested in Natron and plans to use the company's
batteries to electrify its ground operations. Wessells says that Natron
has raised about $175 million since its inception
from a number of investors, including ABB and Khosla
Ventures, among others. Natron and Faradian are just
two of a number of companies trying to commercialize
sodium-ion battery technology. This as a
number of carmakers have already announced plans to
incorporate sodium-ion batteries into their
electric vehicles. As with lithium-ion
technology, China is leading the charge in embracing
sodium-ion batteries. Out of the 20 sodium
battery factories now planned or already in
construction around the world, 16 are in China. The domination that China
has in the current lithium-ion supply chain,
there is a risk that that now extends to the
sodium-ion supply chain depending on where
sodium-ion cell production capacity is built out. And at the moment, it's
looking like China is going to dominate in that, too. Most experts believe that
sodium-ion batteries have the potential to act in
tandem with lithium-ion technology, alleviating
some of its supply constraints rather than
replacing it entirely. Ten years out, I think
sodium ion is going to have a very strong position in
industrial power and grid energy storage. For
electric vehicles, there are going to be certain market
segments where sodium ion is a great fit. The jury is
really out on whether or not that's going to include
mainstream passenger vehicles. We can see a
future in which there could be a lower cost sodium ion
option and that could be a lower trim line on a car. And it may not have quite
the same range, but it would be less expensive. I think where you're seeing
lithium iron phosphate, you'll see sodium ion
taking market share. I mean, lithium ion has a
couple of decades head start over sodium ion. So we will
certainly be taking market share on that for some
foreseeable future. As with any new technology,
success usually comes with scale, which sodium-ion
battery companies have yet to build out. Keeping up with the scale of
growth of the battery market is going to be one of the
probably the largest challenge for sodium ion to
reach large market penetration. Still, sodium-ion battery
manufacturers remain optimistic about the
technology's future. This is a once in a
generation transition from fossil fuels to green
energy on a global basis, and sodium ion is going to
continue to play a big role with that.
