How much cheaper is a sodium ion battery than LFP?

Leach's analysis put the potential benefit at about $40 per kilowatt hour from switching sodium in place of lithium. The LFP baseline he used was around $130 to $140 per kilowatt hour, with sodium ion coming out near $100. He describes the work as crude: it took into account the change in raw material price and the energy density loss on the other side of that equation, and nothing else. It was also done when lithium prices had peaked, so the gap has narrowed since. He still expects sodium ion to be the cheaper chemistry.

Has the falling lithium price wiped out sodium ion's cost advantage?

It has cut into it rather than removed it. Leach's $40 per kilowatt hour figure came from a period when lithium was near a peak, and the price has dropped a long way since, so he says the benefit will have diminished. He did not have an updated number to hand. Sodium remains the cheaper raw material, so the direction of the comparison holds. The question he keeps returning to is whether the drawback in energy density balances out that saving, because that is what decides where the chemistry gets used.

Where is sodium ion actually being manufactured at scale?

In China, almost entirely. Leach singles out HiNa, a company built specifically around sodium ion, which started gigawatt hour scale production at a one gigawatt hour factory. CATL and Gotion have also made announcements, but have not said what capacity they are running at. In Europe and North America the work is at startup scale, with companies developing their technology from a smaller base, and Leach expects that to take a bit longer. He also notes that the cost advantages he modelled only appear at the high end of volume.

Will sodium ion batteries be used in electric cars?

Leach's initial view was that sodium ion would be aimed mainly at energy storage systems, with two and three wheeled vehicles as the likely entry point if it reached transport at all. HiNa's announcement with JAC changed that, and he now thinks it probably will get into passenger cars sometime in the near future. He would not put a year on it. Volume is the constraint: the economies of scale that produce the cost benefit only kick in at high production levels, and the market is not operating there yet.

What are the drawbacks of sodium ion batteries?

Energy density is the obvious one, and Leach frames the whole commercial case as whether that penalty balances out the lower cost. Some companies claim they can reach LFP energy densities in the near future, and others in the industry have suggested that is unrealistic. Reaching those densities while also delivering a long cycle life and hitting the rest of the parameters would be a challenge. Some sodium ion companies also argue their technology is safer, though Leach treats price as the clearer and better established benefit.

What products will use sodium ion batteries first?

Power tools, at least in Europe. Leach heard the chief executive of Tiamat, a French company, say that power tools powered by its sodium ion batteries would be available in France in October. He sees that as a normal route to market: new technologies often start in niche segments before moving anywhere larger. What he wants next is real usage data, because announcements are one thing and long term behaviour, cycle life and performance in the field are another. That data will show which segments sodium ion ends up affecting most.

Episode 132 · 6 June 2024 · 00:06:34

Sodium ion's cost case, and what it still has to prove

Insights on Sodium-Ion batteries

BloombergNEF's Andy Leach on the $40 per kilowatt hour gap between sodium ion and LFP, the announcement with JAC that changed his view of where the chemistry lands, and the French power tools that will carry the first cells.

Read the article: Sodium ion's cost case, and what it still has to prove

Insights on Sodium-Ion batteries cover art

Andy Leach

Analyst, BloombergNEF

Leach began his research career on sodium ion batteries. At the show he opened the keynote and spoke on panels covering sustainability, process optimisation and battery production in Europe.

Recorded in Stuttgart, at The Battery Show Europe

What this episode covers

Leach put a number on the cost gap. His analysis showed roughly $40 per kilowatt hour of potential benefit from switching sodium in place of lithium, against an LFP baseline of about $130 to $140 per kilowatt hour and a sodium ion figure of around $100. He is careful about how much weight it carries: the work was crude, accounting only for the change in raw material price and the associated loss in energy density. It was also done when lithium prices had spiked, so the gap will have narrowed since. Sodium still ends up the cheaper chemistry.

Almost all of the mass production sits in China. Leach points to HiNa, a company set up specifically for sodium ion, starting gigawatt hour scale production, an announcement he thinks took a few people by surprise. CATL and Gotion have made announcements too, without saying what capacity they are running. A handful of companies in Europe and North America are building the technology up at startup scale, and he expects them to take longer. The economics matter here: the cost benefits he modelled only appear at the high end of volume, and the market is not there yet.

The application question moved as well. Leach originally expected sodium ion to land in energy storage systems, and perhaps two and three wheeled vehicles if it reached transport at all. HiNa's announcement with JAC turned that on its head, and he now thinks the chemistry probably will get into passenger cars sometime in the near future. He deliberately would not put a year on it. Building out a sodium ion value chain will be its own problem: the lithium ion industry is already seeing supply crunches, and he expects the same to show up on the sodium side.

The first products are small. Leach heard Tiamat's chief executive say that power tools running on the French company's sodium ion cells would be on sale in October, and he treats that as normal: niche segments are often where a new technology starts. What he wants after that is real usage data. Announcements are one thing, and long term behaviour, cycle life and field performance are another. That evidence is what will show which segments sodium ion actually takes. His stated goal for the following year's show was simple, a sodium ion cell somewhere on the floor.

He is sceptical of the bolder claims. Some companies say sodium ion will reach LFP energy densities in the near future, and others in the industry think that is unrealistic. Getting there while also holding a long cycle life and hitting the rest of the parameters would, in his words, be a challenge. Cheaper looks close to certain. Whether the energy density penalty cancels out the saving is the open question, and it will be answered by cells in products rather than by press releases.

Questions from this episode

How much cheaper is a sodium ion battery than LFP?: Leach's analysis put the potential benefit at about $40 per kilowatt hour from switching sodium in place of lithium. The LFP baseline he used was around $130 to $140 per kilowatt hour, with sodium ion coming out near $100. He describes the work as crude: it took into account the change in raw material price and the energy density loss on the other side of that equation, and nothing else. It was also done when lithium prices had peaked, so the gap has narrowed since. He still expects sodium ion to be the cheaper chemistry.
Has the falling lithium price wiped out sodium ion's cost advantage?: It has cut into it rather than removed it. Leach's $40 per kilowatt hour figure came from a period when lithium was near a peak, and the price has dropped a long way since, so he says the benefit will have diminished. He did not have an updated number to hand. Sodium remains the cheaper raw material, so the direction of the comparison holds. The question he keeps returning to is whether the drawback in energy density balances out that saving, because that is what decides where the chemistry gets used.
Where is sodium ion actually being manufactured at scale?: In China, almost entirely. Leach singles out HiNa, a company built specifically around sodium ion, which started gigawatt hour scale production at a one gigawatt hour factory. CATL and Gotion have also made announcements, but have not said what capacity they are running at. In Europe and North America the work is at startup scale, with companies developing their technology from a smaller base, and Leach expects that to take a bit longer. He also notes that the cost advantages he modelled only appear at the high end of volume.
Will sodium ion batteries be used in electric cars?: Leach's initial view was that sodium ion would be aimed mainly at energy storage systems, with two and three wheeled vehicles as the likely entry point if it reached transport at all. HiNa's announcement with JAC changed that, and he now thinks it probably will get into passenger cars sometime in the near future. He would not put a year on it. Volume is the constraint: the economies of scale that produce the cost benefit only kick in at high production levels, and the market is not operating there yet.
What are the drawbacks of sodium ion batteries?: Energy density is the obvious one, and Leach frames the whole commercial case as whether that penalty balances out the lower cost. Some companies claim they can reach LFP energy densities in the near future, and others in the industry have suggested that is unrealistic. Reaching those densities while also delivering a long cycle life and hitting the rest of the parameters would be a challenge. Some sodium ion companies also argue their technology is safer, though Leach treats price as the clearer and better established benefit.
What products will use sodium ion batteries first?: Power tools, at least in Europe. Leach heard the chief executive of Tiamat, a French company, say that power tools powered by its sodium ion batteries would be available in France in October. He sees that as a normal route to market: new technologies often start in niche segments before moving anywhere larger. What he wants next is real usage data, because announcements are one thing and long term behaviour, cycle life and performance in the field are another. That data will show which segments sodium ion ends up affecting most.

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Transcript

About this transcript. Generated automatically from the recording, then corrected against a glossary of company and guest names. It has not been checked line by line. Machine transcription mis-hears technical terms, numbers and names, so treat any figure here as a prompt to check the recording rather than a quotation of record. Spotted something wrong? Tell us.

0:00Introduction

Dr Simon Engelke

0:00Hi Andy, good to see you. Hi, how are you doing? Pretty good. How has it been? It's been a good,

Andy Leach

0:16it's been a good couple of days. Yeah, I've been enjoying it. I mean you started right off, you

Dr Simon Engelke

0:22know, opening the keynote. So you've been there right in the beginning. Yeah, I've been put to

Andy Leach

0:27work over the last couple of days. It's all good fun though. So yeah, I had a panel discussion yesterday on sustainability, today on process optimization and then tomorrow morning you'll get to hear about, I should probably remember better, but it is with PowerCo, S-Fault and Dow Materials talking about battery production in Europe. Looking forward to that. We want

Dr Simon Engelke

0:53to have a bit of a conversation about sodium-ion because it's one of the hot topics I think of this battery show and anything you can share, any insights? Yeah, I think sodium-ion

Andy Leach

1:02is a really interesting case. At the moment a lot of the activity or at least mass production activity is in China. There's a few companies in Europe and North America who are sort of doing this at more sort of startup and trying to build their technology this way. But that will take a bit longer and the sort of big announcements from companies like HiNa at the end of last year, a sort of dedicated sodium-ion battery company in China starting gigawatt hour production. I think it took a few people by surprise. Initially, my opinion was that it would be more focused towards energy storage systems and maybe two, three wheeled vehicles if at all it came into the transport segment. But their announcement with JAC earlier this year sort of turns out in its head a bit and shows that it probably will get into passenger cars sometime in the near future. I don't want to put a year on that there. A little bit of my next question.

1:58Where the cost advantage comes from

Dr Simon Engelke

1:58And of course it's all about price and that's something you've known about right? Yeah, anything you can see in this regards?

Andy Leach

2:07Yeah, for sure. I think for sure. One of the key benefits is the price. Obviously the drawback is the energy density. Some of the sodium-ion companies say that their big claims that the technology is also safer. But price is definitely one of the main benefits for this technology. I did some analysis at the back end of last year where I think there was about $40 per kilowatt hour potential benefit just by switching the sodium in place of the lithium if you compare to say LFP, which is obviously at the cheaper end of the lithium-ion segment. That will have been diminished a bit since the price of lithium has dropped so much since when I did this analysis there was a bit of a peak in the price of lithium. I don't have the latest number on this. But sodium is definitely still going to continue to be cheaper. It's just whether or not the drawbacks in energy density sort of balance out that cost. But it definitely will be a cheaper chemistry for sure in the future.

Dr Simon Engelke

3:07And is there any rough numbers you can put on? Like you went 40, can you say $40 per kilowatt hour?

Andy Leach

3:12Yeah, sorry. It was $40 per kilowatt hour. So from memory I think this was the LFP that I used in the baseline was something like $130 or $140 per kilowatt hour and the sodium-ion was in around $100. This was, as I say, this was crude. The analysis only took into account switching lithium price for sodium price and the associated energy density losses on the other side of that equation.

Dr Simon Engelke

3:38Yeah, that's going to be interesting, right? To see how low it can get and like how stable and as you say, it's very volatile due to the lithium price. And of course, we really haven't explored much. I think the sodium-ion value chain and maybe what a price crunch there as well.

Andy Leach

3:52Yeah, so that analysis was very much based on gigawatt hour production, which maybe, yeah,

3:59Scale, value chains and Tiamat's power tools

Andy Leach

3:59Haena are doing this in China or they have a one gigawatt hour factory. Other companies like CATL and Gotion have made announcements, but they haven't said what sort of capacities they're at at the moment. So only if these sort of economies of scale only kick in to get these price benefits if we're really at the high end of volume, which the market's not at the moment. And it will be a challenge to build out any of these value chains. We're seeing a lot of crunches in the lithium lithium-ion industry and that's something that for sure will be a problem in the sodium-ion industry as well.

Dr Simon Engelke

4:35And as someone who started his career in the sodium-ion battery space in my research career, I would love maybe next year we might have a sodium-ion battery here. I think that would be my big goal for the next battery show. In the show. Yeah, like in general, like have some exhibitor. Have you found one yet?

Andy Leach

4:53Not a cell exactly, but I was at Tiamat's talk yesterday, the CEO of Tiamat, Herve, was talking and he said that in, I think he said October this year, there will be power tools powered by Tiamat's sodium-ion batteries in France. So they're a French company based in France and they've got power tools that will be powered by their batteries. So if he doesn't bring one himself, I would be amazed. And I said to him after, you know, it's great to see a new technology really sort of come into market, albeit in one of the niche segments, but often that's where these technologies start.

Dr Simon Engelke

5:27For sure. And then getting real usage data because I think that's one of the things where, you know, I think we want to get our hands on it and I get real data because there's a lot, as you say, a lot of announcements and also credible players as well. But I think seeing the real life behaviour long term, etc. cycle life, etc., cycle life, etc., things that are fascinating to see.

Andy Leach

5:45Yeah, announcements can be one thing. And you have some claims that we can get to LFP energy densities in the near future.

5:55Energy density claims and the missing field data

Andy Leach

5:55And some people suggested that that's unrealistic as well. So I think, and also getting to those energy densities, but with something with the long cycle life and hitting all those parameters is going to be a challenge. So as you say, some real life data, some real usage data is going to be key to really seeing which segments will be most impacted by this.

Dr Simon Engelke

6:15So I think there's only one thing. Let's wait for another year. Yeah. And come back again and then hopefully have some real data there. Yeah, exactly. I look forward to it. Thanks so much, Andy. Good to have you. All right. Cheers.