Welcome back everyone! I’m Jordan Giesige and this is The Limiting
Factor. In 2021 CATL launched their sodium ion battery
technology. Many people took this to mean that we’d
soon see sodium ion batteries hitting the market in a meaningful way. But, is that the case? Will we see sodium ion battery cells in a
big way before 2025? For me, the answer to that question is a clear
no. I do expect that to change as the decade rolls
on and there are some caveats attached to that view, but it begs the question: Why don’t
I expect extreme scaling of sodium ion batteries in the next few years given that sodium is
so much cheaper than lithium, so much more widely available than lithium, and given that
CATL is getting in the sodium ion game? CATL has more proven capability of scaling
battery cell production than any other battery cell manufacturer in the world. This video will tackle those specific questions
and I won’t get too deep into the technical aspects of sodium ion batteries. In the next few months, I will make one or
two companion videos to this one to get deeper into the cost and technical details of a sodium
ion chemistries. However, I viewed this video as a priority
because so many people are viewing sodium ion as the Deus ex Machina solution to any
materials bottleneck we might see with lithium ion in the next few years. As we’ll see, that’s unlikely. It’s more likely that the position sodium
ion will fill this decade is to compliment lithium ion battery cell production and shore
up the total number of GWhs produced, rather than being an immediate and all dominating
force that supplants lithium ion battery cell production. Before we begin, a special thanks to my Patreon
supporters and YouTube members. This is the support that gives me the freedom
to avoid chasing the algorithm and sponsors. As always, the links for support are in the
description. First, what’s the basic argument for sodium
ion batteries? It all stems from the assumption that because
sodium is over 100x more abundant in the earth’s crust than lithium, it will solve all issues
related to cost and scalability. Let’s dig in and test that assumption starting
with a basic understanding of the technical challenges of sodium ion batteries. At a high level, how do sodium ion battery
cells differ from lithium ion battery cells? In a lithium ion battery cell, the cathode,
shown here on the right, contains lithium. To charge the battery cell, electricity is
applied to push lithium ions, to the anode. To discharge the battery cell, an electrical
pathway is opened between the anode and cathode. When that happens, the electrons push their
way back to the cathode. The lithium ions follow suit and make their
way back to the cathode. With a sodium ion battery cell, conceptually,
it’s the same principle. The lithium is just replaced with sodium. However, although conceptually it’s simple,
in practice it’s a monumental challenge. A battery cell is a complex dynamic system
spanning six orders of magnitude that juggles matter and energy like a living organism. The difference between a sodium ion battery
cell and a lithium ion battery cell is about as different as the biology between haemoglobin
and chlorophyll. I use this analogy because the haemoglobin
in the red blood cells that runs through our veins and the chlorophyll that makes the leaves
of a tree green have nearly identical chemical structure. The main difference is that haemoglobin has
iron at its core and chlorophyll has magnesium at its core. This helps to explain why, although lithium
ion batteries have been commercialized for around 30 years, we still don’t have a sodium
ion battery that’s proven to be commercially viable at large scale. One does not simply swap lithium for sodium. It changes the dynamics of the entire electrochemical
system due to different voltage potentials, molar masses, and ionic radii. With that said, we are getting close to commercially
viable sodium ion battery cells. Faradion introduced the first sodium ion battery
system in 2015, which seemed to trigger a Cambrian explosion of sodium ion batteries
and investment. It’s just a matter of time before one or
several of these companies succeeds. Let’s get a bit more technical. As I explained earlier, lithium batteries
use a lithium based cathode. However, despite being lithium based, the
cathode is only 7% lithium. The rest of the cathode can use a variety
of different elements such as iron phosphate and nickel oxide to meet the needs of different
use cases. If you want to know more about that, check
out my LFP science video. The same is true of sodium ion battery cells. Sodium ion includes a variety of sub-chemistries
that, like lithium ion, can be predominately iron, nickel, manganese, or cobalt. That is, the metals used in Sodium ion batteries
will, for the most part, be the same metals used in lithium ion batteries, they’ll just
be doped with sodium instead of lithium. This means that many of the same bottlenecks
that apply to lithium ion batteries apply to sodium ion batteries. One of the main bottlenecks for lithium ion
batteries is Nickel, which is currently the only option for a truly long range electric
vehicle. Just like with lithium ion battery cells,
sodium ion battery cells that use Nickel in the cathode can have higher gravimetric energy
densities compared to those that don’t use Nickel in the cathode. For example: Faradion is currently shipping
Sodium Ion battery cells that achieve 160 – 170 Wh/kg at low volume and they expect
to achieve 200 Wh/kg soon. That’s on par with the lithium iron phosphate
battery cells currently being used in Tesla standard range vehicles. But, to hit those figures they need to use
a large helping of Nickel. Faradion’s chemistry is at least 50% Nickel
at the cathode level. So, although I hold Faradion’s technology
and their team in high regard, from a scaling perspective, my view is that Faradion’s
sodium ion chemistry has less global scaling potential on the open market than Lithium
Iron Phosphate based batteries. This is because the limiting factor for lithium
iron phosphate scaling is expected to be lithium, which is an order of magnitude more abundant
than Nickel. That is, using nickel in a sodium ion battery
cell seems counterproductive, because as I said earlier, the whole point of sodium ion
is to reduce cost and increase scalability by using a material that’s more abundant. Faradion’s chemistry seems to trade the
lithium bottleneck for an even worse Nickel bottleneck. Let’s play that out with the table on screen. Lithium is 10x more abundant in the earth’s
crust than Nickel. Another way to view that is that Nickel is
10x as scarce. Next, factor in a 50% Nickel cathode for Faradion’s
sodium Nickel Cathode vs the 7% lithium content in a lithium cathode. To make things fair, we have to take into
account that industries that are already quite large tend to be easier to scale further. The nickel industry is about 25x the size
of the lithium industry. If we multiply scarcity by the amount of cathode
material needed, then divide by a scaling adjustment, it looks like a Sodium Nickel
chemistry would be more than twice as difficult to scale. I’d like to emphasize here that I made this
table to provide a bare bones conceptual framework to compare the scaling challenges of Sodium
Nickel vs Lithium Iron cathodes from only one perspective: The raw materials bottleneck
I expect for each chemistry based on the current situation on the ground today. It doesn’t take into account the other raw
materials needed for the battery cells which would make sodium ion look more attractive. But it also doesn’t take into account the
size of the lithium ion battery industry, which would make lithium ion more attractive
because lithium ion is working off a larger base. As for cost, sodium ion battery cells would
be 0-50% be cheaper than lithium iron phosphate battery cells, depending on who you’re asking. By Faradion’s estimate, 25-30% cheaper at
scale. Let’s call it 28% for brevity. Given all the other complexities of the battery
market, is that 28% cost advantage a market dominating advantage? My view is no, for two reasons: First, that
28% cost advantage is only achievable when the scale of sodium ion battery cells reaches
a manufacturing scale comparable to lithium ion battery cells. The current scale of the lithium ion battery
cell market is about 700 GWhs per year, and that took 30 years. Plus, the lithium ion battery market will
continue to grow, on average, about 25% per year over the next decade, so it’s a moving
target. That is, although sodium ion has a first principles
advantage in cost because sodium is cheap and abundant, it’s fighting against the
mammoth scale of the lithium ion battery industry. So, even if sodium ion scales relatively quickly,
lithium iron phosphate battery cells will continue be cheaper for the next few years
and cost competitive for many years after that. Second, if cost is the primary consideration,
then CATL will likely be the king of sodium ion, not Faradion, because CATL’s chemistry
will be more like 40-50% cheaper than lithium iron phosphate versus Faradion’s 28% cheaper. But before we get to CATL, there are a few
more notes on Faradion. First, many will bring up the fact that Faradion
was purchased by the Indian Conglomerate Reliance Industries and they plan on scaling the technology. The idea here being that I’m wrong about
the potential of Faradion’s technology because they’ve been purchased and intend to scale. But, that’s why I was careful with my wording
earlier in the video. I said that my view is that Faradion’s sodium
ion chemistry has less global scaling potential on the open market than Lithium Iron Phosphate
based batteries. Reliance Industries intends to use Faradion
Battery cells in India for their own projects. There aren’t any product announcements yet
that I’m aware of, but Reliance is a solar power company and I’m assuming we’ll first
see these batteries used as back up for their solar farms. Faradion’s teasing an initial capacity of
10 to 20 GWhs by 2024 for their first battery cell factory in India. It’s certainly possible for them to build
10-20 GWhs of production capacity in 2 years, but the question is: How long will it take
them to scale that capacity with a battery chemistry that’s never been scaled before? On screen is what Panasonic’s ramp looked
like at Giga Nevada, and Panasonic is an experienced cell manufacturer. So, I think the odds are that it will take
Faradion and Reliance at least 1 year and probably more like 2 years to hit a production
rate of 10-20 GWhs and that’s if everything goes fairly smoothly. If that’s correct, it will be 2025 to 2026
before they hit 10-20 GWhs of actual production. Bear in mind that they not only have to build
the battery cell factory, they need to build the supply chain that feeds that battery cell
factory. The cell factory is only about 20% of the
supply chain. By 2025 to 2026, total global production of
lithium ion battery cells could be anywhere between 1 to 2 Terawatt hours. So, Faradion will be supplying about 1% of
the world’s battery supply if all goes well. That’s a good chunk of capacity for one
company in India, but it’s a drop in the bucket compared to what lithium ion will be
doing in 2025 to 2026. This all begs the question: Why would Reliance
invest in a sodium ion chemistry that may not have global scaling potential due to its
high Nickel content rather than buying LFP battery cells on the open market? I’m going to offer my own speculation here:
Tesla announced on Battery Day that they were taking control of their own destiny by moving
battery cell production in house. I think the strategy of Reliance is similar. By using Faradion’s technology, Reliance
can scale at will with in house cell production. As I said earlier, in order for Sodium ion
to realise the lower cost potential of sodium ion technology, sodium ion batteries need
to achieve a scale similar to lithium ion batteries. However, there’s a loophole. As the image on screen shows, LFP batteries
from China have about a 20% premium built in due to shipping fees and tariffs, and another
10% for profit. Any battery cells imported into India would
have expenses like these tacked on. If Faradion manufactures their own battery
cells in house, by default, they’ll cut the cost of those battery cells by around
20%. For example, if the cost of first generation
sodium ion cells on the open market and at low volume was $100 per kWh, they could produce
those cells in house for $80 per kWh, which is what LFP battery cells would have cost
them. Furthermore, if Reliance only scales in India
and for their own projects and doesn’t plan to scale globally, the Nickel bottleneck expected
throughout the decade may not become an issue. So, why not build battery cell production
in house for a price similar to LFP with the potential in the long run for cost to be quite
a bit cheaper than LFP? That is, in the specific case of Reliance,
Sodium Ion could be a great option because it works for the scale, use cases, and market
that Reliance finds itself in. But, that’s my opinion. Let me know what you think in the comments
below. Now that we understand some of the basics
of sodium ion, let’s move on to CATL’s plans for sodium ion. As I showed with this image earlier, the energy
density and materials cost of sodium ion chemistries varies dramatically. Faradion targeted layered oxides using Nickel,
which are high energy density but come with the downsides you’d expect from a Nickel
chemistry. CATL, on the other hand, is targeting PBAs,
or Prussian Blue Analogues. Prussian Blue Analogues are chemicals that
have a similar crystal structure to the chemical Prussian Blue, which is a dark blue pigment
produced by the oxidation of salts that contain iron and cyanide. CATL said they’re using a Prussian White
cathode, but that’s still classed as a Prussian Blue Analogue. Unlike the layered oxide cathodes that Faradion
is targeting, CATL’s Prussian White cathode won’t use Nickel. Instead, it will likely rely on iron and/or
manganese for the bulk of the cathode mass. That is, every material that will go into
CATL’s sodium ion batteries will be exceedingly abundant. So CATL is picking a chemistry that will be
able to scale without restraint for several decades. In fact, it may never hit a bottleneck. CATL claims that their first generation sodium
ion batteries will have an energy density of 160 wh/kg. However, there’s a reason why CATL focused
on the gravimetric energy density, which is energy density for a given mass expressed
in wh/kg. Sodium ion batteries can have gravimetric
energy densities nearly as good as lithium iron phosphate batteries, but their volumetric
energy density, expressed in Wh/l, tends to be much lower. As this calculation by Matt Lacey indicates,
the volumetric energy density of a sodium ion battery cell will be roughly a third less
than the energy density of an LFP chemistry. So CATL’s battery cells will be poorly suited
to cars because the range would be a maximum of about 180 miles, or 290 kilometres, for
a vehicle the size of a Tesla Model 3. However, although CATL’s sodium ion battery
will have low energy density, it’ll have the benefit of long cycle life because Prussian
Blue Analogues typically have very robust crystal structures. Sodium Ion battery cells should have a cycle
life comparable to LFP batteries, which last for thousands of cycles. This will make sodium ion battery cells perfect
for energy storage where more cycles means a greater return per dollar of capital invested
and where energy density for space and weight is a minor concern. CATL’s advised that their first generation
sodium ion battery cells will cost $77 per kilowatt hour. That’s comparable to the price of LFP battery
cells before the current bought of inflation, and considerably less than the current price
of LFP, which is around $100 per kilowatt hour. Based on all that, what’s the hold up? Why am I saying that we won’t see sodium
ion battery cells in a big way before 2025? Why wouldn’t companies just stop producing
LFP battery cells for energy storage and cut over to sodium ion battery cells that are
cheaper and that have similar performance? First, it’s because the demand for batteries
is insatiable. As I covered in my Tesla: Battery Material
Strategies video, we’ve been ramping lithium ion battery cell production exponentially
for 30 years. But, in the next 20 years, we need to increase
production by about 40x the current global production to transition the world to sustainable
energy. Forecasts indicate that throughout this decade
maybe half of demand will be met and shortages won’t be resolved for another 15 years. That is, Lithium ion batteries will need to
continue to ramp as strongly as possible, and then on top of that, we need every battery
cell from every commercially viable chemistry to support the transition. So no, sodium ion batteries aren’t competition
to lithium ion. The world needs to ramp both chemistries as
forcefully as possible, and it still won’t be enough to meet demand. And what can we expect from a sodium ion battery
cell ramp by CATL? First, in absolute terms it’s easier to
ramp lithium ion battery cell production than sodium ion battery cell production because
the lithium ion battery industry is already at scale. There’s a stronger skeleton of manpower,
machines, methods, materials, and money to build on. We’re at the point where lithium ion is
now growing at hundreds of gigawatt hours per year. Asking sodium ion to grow by 100 Gigawatt
hours in a year is like asking a 10 year old to put on 50 pounds of muscle mass in a year. The skeleton and starting mass just isn’t
there yet. Most Sodium ion manufacturers are at pre-pilot
or pilot production scale, which also means that the supply chains to supply those lines
are almost non-existent. Additionally, as I said before, the difference
between a lithium ion battery and a sodium ion battery is like the difference between
the biology of plants and animals. That will most certainly create new and different
challenges for scaling sodium ion. For example, sodium ion cathodes are more
sensitive to moisture, which will create headaches up and down the supply chain for quality control. That’s solvable, but nuance becomes headache
at thousands of tonnes per year. That is, the maturity of the lithium ion industry
and the lack of maturity in the sodium ion industry will be a tailwind for lithium ion
battery cell production and will be a challenge for sodium ion battery cell production. Yes, most of the skills will be transferable
from lithium ion to sodium ion, but knowledge and experience matters and scale matters. If you wanted to start a lithium ion battery
cell factory and the supply chain that feeds that factory, you have a pool of thousands,
if not tens of thousands of engineers to pull from to get things moving. This is why lithium ion battery cell factories
are pushing up like dandelions. Although there is a shortage of battery engineers,
there’s still a massive pool of existing talent to pull from. And it’s not just me pointing out the relevance
of the supply chain. CATL’s own advice is that they hope to have
a basic supply chain in place for sodium ion by 2023. A basic battery materials supply chain is
almost an oxymoron because battery material supply chains at scale are complex. For example: Sodium ion battery cells use
hard carbon anodes instead of graphite anodes, so they’ll need a hard carbon anode factory. Hard carbon anodes can be derived from dozens
of sources, meaning at least as many potential outputs and manufacturing processes. And, contrary to some videos I’ve seen on
YouTube, sodium ion cathodes just can’t use table salt, which is sodium chloride. They’ll instead use sodium carbonate, and
it will need to be ultra-high purity sodium carbonate, which, like most battery grade
chemicals, may require a specialized refinery. Then, that battery grade sodium will need
to be processed into a cathode using a using a cathode recipe that’s never been tried
before at scale, which is a science unto itself. If you’d like to know more about the challenge
of creating a cathode recipe, check out my interview with Mitra Chem.
CATL has a lot of talent and I’m betting they’ll kick butt and get it done, but don’t
expect a basic supply chain to mean battery cell production deep into the double digit
gigawatt hours of production. Do expect that basic supply chain to take
a year or two to hit its nameplate capacity, whether that’s 1 gigawatt hour or 20 gigawatt
hours. Even in a best case scenario, where sodium
ion is able to scale fantastically and hit 100 GWh from all manufacturers combined by
2025, that’s still only about 10% of total global battery cell supply in 2025. But, in my view, in light of everything above,
100 GWh of actual battery cell production, not manufacturing capacity in 2025 is super
aggressive. For example, Wood Mackenzie only expects 20
GWh of sodium ion battery cells by 2030 in their base-case scenario. Let’s stop for a moment here to appreciate
the lesson that sodium ion is teaching us. Think about all the articles you’ve read
about breakthroughs in battery technology. My definition of a breakthrough is something
that not only makes it to production but disrupts an industry. Most battery tech hailed by the media as breakthroughs
never meets those criteria. The first question you should ask about any
breakthrough is: Where’s the factory? And then, can this product displace the incumbent
technology in all or most use cases. But, what about the rare technologies that
come along about once every five years, like CATL’s sodium ion battery cell that ticks
every box from commercially useful and viable, to cost, to materials availability? With a chemistry as new and different as sodium
ion, it still takes about a decade from product announcement to changing the world. Relative to lithium ion, it won’t be until
after 2025 that we see sodium ion making a meaningful contribution to transitioning the
world to sustainable energy. And, it won’t be until after 2030 that the
sodium ion battery cell market will start taking market share from lithium ion in a
big way. And, it could be maybe 2035 before it overtakes
lithium ion as the dominate battery cell chemistry in terms of total GWh produced. But, that’s if everything goes well and
involves quite a large number of assumptions. Namely, that companies like Tesla will embrace
sodium ion immediately and whole heartedly. Lithium ion has eccentricities, but those
eccentricities are well understood after 30 years. Sodium ion doesn’t have that luxury, and
it certainly has its own eccentricities. I’ll cover some of those eccentricities
when I eventually do a more technical companion video to this one. In summary, sodium ion batteries are a such
a promising technology that they’re almost a foregone conclusion. I think they have an extraordinarily bright
future based on the fact that they have a first principles advantage vs lithium ion
battery cells. That is, they use cheap materials that are
nearly infinitely scalable. However, it will still be steep hill to climb
because manufacturing is never easy, particularly when it’s at a global to scale. In order to see sodium at massive scale by
the mid-2020s we’d have to see those projects announced now or by the end of the year and
lots of buzz from the companies that would be using those battery cells. So far we’re only looking at hints of a
basic supply chain and 10-20 GWhs of production. And, I haven’t heard of any major manufacturers
that have firm plans to use sodium ion. The focus is on lithium ion chemistries with
Nickel and Iron rich Cathodes. On that note, while I was scripting this video,
Drew Baglino, who’s Tesla’s Senior Vice President of Powertrain and Energy Engineering,
did an interview with Stanford Energy. He commented on Sodium Ion and to the best
of my knowledge, this is the first time someone within Tesla has commented publicly about
sodium ion batteries. Drew said that if it’s possible to get sodium
to be as compelling as lithium, then Tesla might do Sodium Ion for energy storage. This is just as I suggested above for CATL’s
PBA based cathode, which has low energy density but high cycle life. Drew also said that currently, the road for
batteries is lithium or bust, and it would be great to have one more entrée at the table. Again, as I suggested throughout the video,
the challenge of transitioning the world to sustainable energy will require every battery
cell from every chemistry that we can get our hands on. Sodium ion isn’t a replacement for lithium
ion, it’s a much needed reinforcement to support Tesla’s growth. As I suggested in the Tesla: Battery Material
Strategies video, scaling lithium ion at 50% per year will become increasingly difficult
throughout the decade. A compelling sodium ion chemistry would increase
my confidence that Tesla could continue to scale at 50% per year into the late 2020s. That is, sodium ion might just arrive in time
to meet Tesla’s needs in the late 2020s. But, in order to meet those needs, that ramp
has to start now because it will take a good 5 years to get the supply chain in place and
work the kinks of the chemical processes used to manufacture the chemicals that go into
those batteries. It’s not as simple as just building a sodium
ion battery cell factory. Just like there’s a supply chain for lithium
ion from lithium mine to battery line, sodium ion will need to build an entire supply chain. There will be challenges at each stage, from
refining and precursors to cathode and anode production to battery cell production. As usual, I’ll keep a close eye on the battery
industry and I’m excited to watch the sodium ion industry unfold. And of course, I’m slowly building up technical
knowledge on sodium ion and aiming to do a more technical video in the coming months. If you enjoyed this video, please consider
supporting me on Patreon with the link at the end of the video or as a YouTube member. You can find the details in the description,
and I look forward to hearing from you. A special thanks to jbcarioca, Trevor Woudt,
Paul G, and Christopher Lee Jones for your generous support of the channel, my YouTube
members, and all the other patrons listed in the credits. I appreciate all your support, and thanks
for tuning in.
Another great one. I'm going to have to keep this in my pocket whenever Reddit Armchair generals post about how Sodium is going to just up-end everything and somehow that'll destroy Tesla which to them is a 'good' thing.
Very good video, and the reality really is, how will tesla scale at 50% per year if the global supply chain of lithium batteries can only scale at 25% per year?
Even if tesla has ALL of the supply chain, they wont be able to scale at 50% per year without alternatives
The Limiting Factor is always a huge treasure trove. Everyone should listen to this channel.