“Lithium Valley” has Riches, But How Much Will We Need?

May 12, 2023

Good 60 Minutes explainer of Lithium extraction at the Salton Sea geothermal site in Southern California.

While lithium is a huge player in current battery production, it’s reign might not be as long, or as dominant, as experts thought just a few years ago. Sodium Ion batteries coming on strong, could be especially competitive in grid storage applications.

MIT Technology Review:

Sodium-ion batteries have been in development for over half a century, and their performance has improved consistently, with especially steep gains over the past decade, Meng says. Battery researchers have worked out earlier issues with lifetime, partly by finding more compatible electrolytes (the liquid that helps ferry charge around in a battery) for the electrode materials used in sodium-ion cells. Researchers have also developed better electrode materials to boost the batteries’ energy density. 

But the real reason for sodium-ion’s sudden surge in popularity is that lithium mines and processing facilities are straining to meet skyrocketing demand for EV batteries.

The world isn’t going to run out of any materials needed for EVs or renewable energy infrastructure anytime soon. Estimated reserves suggest that Earth’s crust has plenty of lithium for billions of EVs. But adding the infrastructure to pull lithium and other materials out of the ground and process it for use in batteries is proving to be a challenge. It can take the better part of a decade in most parts of the world to get a new mine built.

The volatility in lithium prices and the steadily increasing demand have opened the door for other chemistries, Meng says, adding: “I think sodium is considered a good alternative to relieve that pressure.” Unlike lithium, sodium can be produced from an abundant material: salt. Because the raw ingredients are cheap and widely available, there’s potential for sodium-ion batteries to be significantly less expensive than their lithium-ion counterparts if more companies start making more of them.

But if market conditions have opened the door for lithium alternatives, they could just as easily slam it shut. The fate of sodium-ion batteries will likely be “directly tied to the cost of lithium,” says Jay Whitacre, a battery researcher at Carnegie Mellon University and previous founder of a sodium-ion battery company called Aquion.

If sodium-ion batteries are breaking into the market because of cost and material availability, declining lithium prices could put them in a tough position. It’s hard enough to make new batteries and build them at large scale, Whitacre says. It’s even harder to chase a moving target of ever-improving lithium-ion batteries that are getting cheaper. 

Sodium could end up in EV batteries in China as early as the end of this year, but the technology probably won’t overthrow lithium. Rather, the world of batteries will likely continue to branch out and diversify, with companies developing more battery options for different situations. There are “nooks and crannies” in the battery market, as Whitacre puts it, and soon, sodium-ion might finally find its place. 

Wall Street Journal:

If sodium is the new lithium, investors may need to rethink a favorite energy-transition trade.

One of the most potentially disruptive snippets of news to come out of the Shanghai auto show this week wasn’t from Tesla or one of its flashy Chinese competitors but from a company that doesn’t make vehicles at all: CATL. The world’s largest battery producer said its first sodium-ion battery would power electric vehicles built by Chinese brand Chery, though it didn’t say when.

This adds to a drip-drip of signals that cheaper sodium-ion battery chemistry is moving out of the science lab and onto streets. Another one: Chinese EV leader BYD on Tuesday launched a hatchback, the Seagull, one variant of which may run on a sodium-ion battery, according to some reports that the company hasn’t confirmed. If the Seagull doesn’t use the new chemistry, other coming BYD models likely will.

New technologies usually seep into the car industry from the top end, where consumers can afford the latest gadgets. Battery innovations, where the big goal is reducing cost, are shaping up differently.

Cheaper but less powerful lithium iron phosphate, or LFP, batteries once weren’t considered a mainstream alternative to those that drive most EVs outside China today, which are rich in nickel and cobalt. Then nickel and cobalt prices rocketed, forcing auto makers to find workarounds as they prepared their EV supply chains for growth. In 2021, Tesla said it would adopt LFP for some lower-range models. Ford, Volkswagen and others have since taken the same route.

Could sodium-ion technology follow the pattern? LFP replaced scarce nickel and cobalt with abundant iron, but doubled down on scarce lithium. As nickel and cobalt prices cooled last year, lithium prices stayed high. Sodium ion in turn replaces scarce lithium with abundant sodium. The price of battery-grade lithium carbonate in China has dropped 60% this year, according to data provider Benchmark Mineral Intelligence. Slower EV sales in the country as subsidies expired are the most obvious reason, but behind the scenes the rise of sodium ion might be another.

The new technology is less powerful than the latest lithium batteries. But it matches the older generations of lithium batteries that are in EVs today, so consumers might not care. And it has other advantages—being less fire-prone and more capable in freezing temperatures.

Sodium ion will almost certainly find a role in the fast-growing battery industry, particularly for applications where energy density matters less, such as grid storage and small city EVs. The question is how wide it will be. That depends not just on the technology, but also on lithium prices. Its recent price drop might take some of the momentum out of the search for alternatives.


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