Sodium Set to Make Assault on Lithium’s Battery Stronghold

By Glenn Dyer | More Articles by Glenn Dyer

Will this news damage Australia’s lithium industry and the appetite in the renewables sector for the key metal?

The renewables sector around the world is watching moves by BYD and its bigger Chinese battery rival CATL to start mass production of sodium-ion batteries.

CATL and BYD’s sodium-ion batteries will both be in mass-produced vehicles within the year, and the batteries will both be a hybrid of sodium-ion and lithium-ion, according to Chinese media reports this week.

The use of sodium (which is cheaper and easier to use in cold climates) was driven by the huge surge in world lithium prices last year. That bubble has been pricked , with CATL reporting this week that lithium prices are down sharply so far in 2023 – more than 50% for battery quality material and over 70% for industrial quality product.

If sustained, that now makes lithium more competitive than it was a year ago.

Sodium is not being looked at as a replacement for lithium, more a mixing partner for use in some types of batteries and small EVs and Plug-ins.

CATL’s sodium-ion based battery will be installed in the first model of Chery’s new energy vehicle (NEV) brand iCAR, which is expected to be launched in the final quarter of this year.

The battery will also be used in Chery’s small NEVs, such as the QQ Ice Cream and the Little Ant.

With the big rise in lithium prices last year, leading battery makers including BYD and CATL have accelerated the pace of sodium-ion battery development.

Chinese business websites say BYD’s sodium-ion battery will also be in mass production in the second half of the year, and the first model to carry the battery will be the Seagull which was revealed this week as an urban runabout with a US dollar value price in China of $US11,500.

It will come with a hybrid sodium-ion/lithium-ion battery, according to the report.

Sodium-ion batteries cost less, but currently have low energy density and therefore a small range – range anxiety is the biggest drawback from a consumer’s point of view.

Using a mix of sodium and lithium adds to the density and range and should also make EVs more attractive in colder parts of China (in the north) where existing lithium-ion batteries are sluggish and range bound.

At the moment, sodium-ion batteries can generally meet the needs of models with a range of up to 400 kilometres, A CATL research executive told a forum in China last November.

CATL claims to have achieved a mix of sodium-ion and lithium-ion, allowing them to complement each other and thus increase the energy density of the battery system and the range to around 500 kilometres which is the majority of the Chinese market.

But other Chinese experts say sodium and lithium will be complementary and the mix idea being pushed by CATL and BYD could end up as a compromise for EVs and plu-ins operated in colder areas of China, Europe and North America.

But the news of the move to start installing them in EVs this year could be enough to keep a lid on lithium prices even if the success won’t be known until 2025 at the earliest.

Installation numbers, operating performance and range figures will all have to be analysed to see how sodium stacks up against lithium, even if the price is an advantage.

BYD has the biggest advantage because it has a growing list of NEV types it is making and can use as test beds for the new style batteries. It doesn’t have to negotiate with carmakers as CATL is having to do.

But you can bet that while interesting, sodium will not replace lithium because why else would Elon Musk’s Tesla be starting work soon on its own lithium refinery to be built in southern Texas.

It’s the one thing you can bet on that Musk would understand the strengths, weaknesses and advantages and disadvantages of lithium and sodium.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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