U.S. and European startups are racing to develop new batteries using two abundant, cheap materials — sodium and sulfur — that could reduce China’s battery dominance, ease looming supply bottlenecks and lead to mass-market electric vehicles (EVs). Today’s EVs run on lithium ion batteries — mostly made with lithium, cobalt, manganese and high-grade nickel, whose prices have soared. Western producers are struggling to catch up with their Asian rivals, and carmakers expect supply bottlenecks to hit car production around the middle of the decade.
The EVs of the future — those arriving after 2025 — could shift to sodium ion or lithium sulfur battery cells that could be up to two-thirds cheaper than today’s lithium ion cells.
But their promise hinges on potential breakthroughs in electrochemistry by such startups as Berlin-based Theion and UK-based Faradion, as well as Lyten in the United States. Newer battery chemistries have problems to be overcome. Sodium ion batteries don’t yet store enough energy, while sulfur cells tend to corrode quickly and don’t last long.
Still, more than a dozen start-ups have attracted millions of dollars in investment, as well as government grants, to develop new kinds of batteries. For now, China dominates battery production, including the mining and refining of raw materials. Benchmark Mineral Intelligence, a UK-based consultancy, estimates China currently has 75% of the world’s cobalt refining capacity and 59% of its lithium processing capacity.
“We’re still dependent on a material supply chain from China,” said James Quinn, chief executive of British sodium ion battery startup Faradion, which received more than $1 million in government grants from Innovate UK before it was bought by Indian conglomerate Reliance (RELI.NS) last year for $117 million. “If you look at the global geopolitical implications of that, it’s a challenge for energy security, economic security and national security.”
Asian battery giants are also working on new chemistries. China’s CATL (300750.SZ) has said it plans to begin producing sodium ion cells in 2023. Korea’s LG Energy Solution (373220.KS) aims to start making lithium sulfur cells by 2025.
INSIDE THE BATTERY
The single most expensive element of an EV battery is the cathode, which accounts for up to a third of the cost of a battery cell.
Most EV batteries today use one of two types of cathodes: Nickel cobalt manganese (NCM) or lithium iron phosphate (LFP). NCM cathodes are capable of storing more energy, but use costly materials (nickel, cobalt). LFP cathodes typically don’t hold as much energy, but they are safer and tend to be less expensive because they use materials that are more abundant.
The cost of key cathode materials such as nickel and cobalt has skyrocketed over the past two years.
That’s why so many companies are hoping to substitute cheaper, more abundant materials such as sodium and sulfur, if their technical limitations can be overcome.
“Sodium ion definitely has a place, especially for stationary storage and low-end vehicles in cost-sensitive markets such as China, India, Africa and South America,” says consultant Prabhakar Patil, a former LG Chem executive. “The introduction cost for lithium sulfur is likely to be higher — even though it has the potential to be the lowest cost — making consumer electronics the initial application,” Patil said.
Michigan-based Amandarry and British startup AMTE Power (AMTE.L) are developing sodium ion batteries using sodium chloride — basically table salt — as the main cathode ingredient. They do not need lithium, cobalt or nickel — the three most expensive battery ingredients.
Jeff Pratt, managing director of the UK Battery Industrialisation Centre – a state-funded 130 million pound ($153 million) factory that rents out its production lines to startups to test battery chemistries – said he is trying to fit a sodium ion startup’s cells into a packed production schedule because it is “strategically important” to Britain’s hopes of being at the forefront of developing new, better batteries.