Sodium-ion could be the next big thing. Last August, Natron announced a $1.4B factory in North Carolina. Other U.S. companies like Peak Energy, Bedrock Materials, and Acculon Energy are jockeying for position in the market. Meanwhile, almost all of the world’s sodium-ion manufacturing capacity, current and planned, is in China. CATL’s CEO Robin Zeng suggested that sodium-ion could ultimately take up to half of LFP’s market share.
The potential advantages are exciting: Sodium-based chemistries could be cheaper and safer. They could also use domestically sourced materials, avoiding the geopolitical headaches of minerals critical to the lithium-ion supply chain, like nickel, cobalt, and copper.
So, amid all the sodium-ion hype, what’s credible and what’s not?
In this episode, Shayle talks to Adrian Yao, founder of Stanford’s STEER program, a battery research group specializing in techno-economic analysis. He’s also a board member of lithium-ion manufacturer EnPower, where he was once a co-founder and CTO. Shayle and Adrian talk about the findings from a recent Nature paper Adrian co-authored exploring a techno-economic analysis of sodium-ion batteries. They cover topics like:
- The differences between sodium-ion and lithium-ion, as illustrated by the battery sandwich
- Misconceptions about sodium-ion, for example, that it’s necessarily safer
- The biggest challenges: energy density and cost competitiveness
- How players in the lithium-ion supply chain could pivot to sodium-ion
- Why the technology’s success may hinge on the price of nickel, copper, and other lithium-ion materials
Recommended resources
- Nature Energy: Critically assessing sodium-ion technology roadmaps and scenarios for techno-economic competitiveness against lithium-ion batteries
- Latitude Media: Peak Energy’s quest to build US sodium-ion battery dominance
- Heatmap: Is Sodium-Ion the Next Big Battery?
- WSJ: U.S. Battery Rush Spurs $1.4 Billion Sodium-Ion Factory in North Carolina
Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor.
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Transcript
Stephen Lacey: Hey, it’s executive editor Stephen Lacey. Many of you were loyal listeners to a show I created and co-hosted for eight years called The Energy Gang. Well, we’re back Jigger Shaw, Catherine Hamilton and I are excited to announce our latest project, a weekly news round table called Open Circuit. Every week we’ll break down how major projects come together, how deals and policies get structured, and what it takes to build critical infrastructure at scale, all through the lens of current events. You can subscribe to open circuit wherever you listen to podcasts or follow it@latitudemedia.com.
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Shayle Kann: I’m Shayle Kann and this is Catalyst.
Adrian Yao: Oftentimes, we celebrate the potential for sodium-ion to have a lower materials cost dollar per kilogram. We also recognize and admit that energy densities could be lower, but we don’t sometimes put the two and two together to recognize that it is very hard for a low energy density system to be competitive on a dollar per kilowatt hour basis because of that math
Shayle Kann: Coming up: We talk sodium-ion batteries. Finally.
I’m Shayle Kann. I invest in revolutionary climate technologies at Energy Impact Partners. Welcome. Alright, so this one I think is a long time coming. Sodium-ion batteries have been on the scene, so to speak, in the battery world for the past few years as a possible long-term replacement for at least lower density, lower cost lithium-ion batteries, LFP batteries in particular, the theoretical benefits of sodium-ion are multifold. Here’s my subjective ranking of those benefits from I think most certain to least certain supply chain and geopolitics is a big one. There is a possibility of it being semi drop in for existing manufacturing capacity, or at least easy to manufacture similarly to how we make lithium-ion batteries cost, potentially question mark and safety potentially. Anyway, that’s a bunch of things and if you could hit all of those things, there’s a clear reason why sodium-ion would be really exciting.
And indeed we’ve started to see the predictable pattern of announcements from big battery suppliers and many of the largest in the world and in China who say they’re working on sodium-ion or they’ve developed sodium-ion batteries of one kind or another as well as a number of players who are trying to do sodium-ion domestically here in the US or in North America. So what are sodium-ion batteries? Why sodium-ion batteries and what do we think it would take to actually materialize these theoretical benefits that they hold in my mind, particularly with regard to cost, which is the characteristic that matters more than all others combined? So I wanted to talk to Adrian Yao about this. He’s been working on this question for years now. He’s a former battery entrepreneur himself in lithium-ion world of course, but he joined Stanford a few years ago where he leads the steer initiative, which is a partnership between Slack, the linear accelerator lab, not the business tool and the Stanford Preco Institute for Energy. Anyway, Adrian and some colleagues recently published what I think is the best paper that I’ve seen in Nature Energy, that is examining the cost question for sodium-ion and projecting how the techno economics could play out depending both on scale and the technology roadmap. So let’s dig in. Here’s Adrian.
Adrian, welcome.
Adrian Yao: Thanks for having me.
Shayle Kann: All right, let’s talk sodium-ion batteries. Why don’t you start by explaining how a sodium-ion battery works, I guess in reference to a lithium-ion battery? What’s the same, what’s different?
Adrian Yao: Sure. Yeah, so I think anyone or people around me know that every time I talk about batteries, I talk about sandwiches because sandwiches are a great analogy, so I’ll do the same here. Basically when we think about a sodium on battery or lithium-ion battery, basically you can think of it as a sandwich with two pieces of bread. Those are your electrodes separated by some kind of lettuce separator. That’s a very boring sandwich soak in some kind of soup. And so when you’re charging and discharging, all you’re doing is just passing sodium-ions or lithium-ions back and forth between the two pieces of bread through the lettuce in the soup. And so I think it’s important to recognize that when we think about both lithium-ion and sodium-ion batteries, that those are umbrella terms. There are different flavors of sandwiches within both of those and it’s important to get into.
So we focus on lithium-ion first there. One side of the sandwich is almost always graphite and that is the negative side of the sandwich, the anode. And so we mostly distinguish lithium-ion batteries by the positive side of the bread. And so this is basically swapping out sourdough for whole wheat or something like that. And so there’s obviously mainly two kinds of chemistries here. There’s one that is nickel based and this is the high energy density kind that uses your typical elements like nickel, ese, and cobalt. And these are the more appropriate potentially for longer range vehicles and so forth because of their high energy density. Now the other very common class of bread here is the phosphates with iron. And this is really the LFP kind of chemistry. Of course they have an energy density penalty that many of your listeners know, but they are safer and cheaper.
And so they’re widely adopted for basically standard range vehicles or almost a hundred percent of new grid scale battery energy storage installations today. Now when you’re assembling the sandwich, the positive side is really fac side that is endowed with all of the ions, be it sodium-ion or lithium-ion that will be useful for the lifetime of the battery. And so when you basically finish off manufacturing and seal it off in this proverbial say, Ziploc bag that has the positive side of the bread has all of the ions for the rest of the useful life. So if we come to sodium-ion, it’s identical in structure and that’s very useful and that’s one of the exciting things about sodium-ion is that basically it can leverage a lot of the existing know-how and manufacturing expertise that we have. Zooming in a little bit again on this kind of chemistry similar to lithium-ion, the negative side of the sandwich is almost always the same.
It is also a carbonaceous material like graphite, but very importantly it is not graphite. Graphite is chemically incompatible with basically sodium and so we use a material instead called hard carbon. So similarly, we then often characterize sodium-ion chemistries by their positive side. And this is where I think it is very important to begin to ensure that we don’t treat sodium-ion as a monolith. There are very different chemistries that we need to be clear about because they have very different implications on safety, on cost and supply chain. So just as we have these layered oxide chemistries like the NMC in lithium-ion, we have layered dioxides in sodium-ion mostly relying on a nickel manganese and instead of cobalt, more like iron or copper. Now similarly, just as we have phosphates in lithium-ion, we have phosphates or pyrophosphates in sodium-ion, and this is really nickel free, cobalt free and really relying mostly on iron.
And then there’s yet another class called Prussian blue, which some of your listeners might’ve heard of that are typically much lower energy density but can pack up punch in terms of power and potentially less relevant for example, mobility applications or high energy density applications. So that’s really kind of the usual suspects. The one last key difference between these two if you’re looking at these two sandwiches side by side is basically that whereas the substrate metal foil that the negative bread is attached to usually in lithium-ion has to be copper in sodium-ion, it can be aluminum and that’s lighter, it’s cheaper. It has some other benefits that we can get into later, but apart from all of that, everything else is identical. And so even the manufacturing and so that’s why the drop replacement is very interesting.
Shayle Kann: So you alluded to a couple of these, but I think we just spend a minute talking about why there is excitement about sodium-ion. There are lots of different battery chemistries out there. I’d say sodium-ion outside of lithium-ion, at least in the current state of affairs in the world is probably getting the most attention. So I want to run through the list of potential benefits why you can imagine a world where sodium-ion takes a significant share of global energy storage, certainly stationary, possibly mobile applications as well. So let’s run through the theoretical benefits and then I think we could spend some time talking about the market and how real some of these benefits are. But one big one is it’s a very different supply chain and perhaps one that is a little bit more palatable geopolitically
Adrian Yao: Potentially. I say it is in some cases, that it is not in some cases. So if we kind of come back to how you put it, the theoretical benefits, I would categorize ’em to three buckets, right? There’s a supply chain argument, there’s the drop in manufacturability argument, and then there’s a safety argument. Now for all three there are asterisk because it’s never that simple. And so we’ll come back to those asterisk I’m sure. But if we just look at lithium, right? Lithium in the supply chain bucket, the first bucket, lithium of course famously went on this wild ride in 2022. This is kind of post covid supply crunch nickel as well. Went through a supply chain crunch in 2022 really because of the Russian invasion of Ukraine. And so that caused lithium-ion itself to see some major price swings, and that’s why in 2022, the price of lithium-ion spiked for the first time spike is maybe a dramatic word, it just went up for the first time in its entire history and thereafter crashed.
So those are some of the key supply chain issues. Another key geopolitical supply chain issue is the graphite, right? Graphite, over 93% of the world’s battery grade graphite comes out of China and it’s now kind of a retaliatory geopolitical weapon to use graphite export controls to hit back against the semiconductor export controls that we have on our end against China. So those are some of the things that you can point to as a potential means to have sodium be successful. Sodium carbonate soda ash is basically $200 per ton as opposed to where lithium-ion sits right now, $10,000 per ton, but in the height of 2022, lithium was at basically 60 to maybe some cases $80,000 per ton. So it’s a very big difference in that price spread. So that’s the supply chain argument.
Shayle Kann: Can I just add to that? I think the other potential benefit from a supply chain perspective is this isn’t necessarily true forever, but certainly as it stands today, not only is the lithium production predominantly outside of North America, it’s in South America and in Australia, but lithium refining is almost exclusively in China. If you’re doing refine, if you’re doing soda ash refining or whatever, that supply chain hasn’t been stood up yet. So you can imagine it being stood up domestically from the start, and I think a lot of people are excited about
Adrian Yao: That’s Rrght.
Shayle Kann: Okay, so that’s supply chain. So replace lithium with sodium, you’ve got cheaper, maybe lower volatility, maybe the opportunity to onshore. You mentioned number two, which is the drop in manufacturing potential. This is one that I know is more nuanced than often is given credit to, but what’s the high level idea there?
Adrian Yao: Well, the high level idea I think we touched on just now is basically the structure of the battery itself is almost identical to that lithium-ion. They’re both sandwich structures. The electrodes are, the material powders are brought in mixed into slurries, coated onto foils, calendared, slit punched, stacked. If it’s a pouch cell or wound into cylindrical or prismatic cells, all of that stays the same between lithium-ion and sodium mine. And so basically the potential to benefit from what is already a learned process where we don’t have to spend so much time traversing down that learning curve is really the opportunity here compared to other new emerging battery chemistries that might even use, for example, liquid-based electrodes or air as an electrode or something like that. So that’s really the argument here for and why sodium mine has gotten so much, so quickly, so much hype.
Shayle Kann: So what people say sometimes is that if you want it to swap an existing battery manufacturing line over from lithium-ion to sodium-ion, you could do it pretty quickly and pretty easily and you wouldn’t need to reinvest in a bunch of new CapEx from what? How true is that?
Adrian Yao: I think true in some cases, not true in others. I think if you were a small player in China today, you could, and I think there are anecdotal evidence of such things happening. I know of some cell makers who are experimenting or maybe toying with the sodium mine space seeing that there’s a lot of activity in LFP low cost LFP because of how cheap it is and there’s just much more demand for it. And so they can swap their lines. Obviously there’s a lot of cleaning, there’s a lot of cost contamination that you need to control, but in general it’s doable. But if you were to think about a 30 or 35 or 10 gigawatt hour plus factory that you were going to be building for a dedicated supply, it is generally designed for one product that you make and that flexibility could be there, or most likely you’re really not going to experiment too much at that scale with swapping out with a chemistry. I mean even sticking in a new material from the, even sticking, for example, a new graphite product number or part number would require quite a lot of heavy lifting. So the portability giga-scale is pretty, maybe not as what we think.
Shayle Kann: Yeah, maybe the better way to think about it is it’s not like we’re going to be retrofitting a ton of gigafactories from lithium-ion to sodium-ion, but because it is such a similar manufacturing process, it’s better understood it’s probably lower risk. You can imagine if you’re building a greenfield sodium-ion battery factory, it’s less of a leap than something entirely novel.
Adrian Yao: And I think a lot of that driver is in the equipment space. If you were to create a new complete battery architecture with a different kind of electrode where you’re not coding and calendaring and slitting it, it’s formed in a certain way or whatever the CapEx, the capital equipment side of things, that supply chain is not built out. Whereas for sodium-ion you have the same players, so you use same usual suspects that you can make the same kind of chemistry on the same equipment.
Shayle Kann: So that’s the first two supply chain benefits potentially drop, semi drop in manufacturing potential benefits. And then there’s safety, which to my understanding is kind of the least certain of the three. But what’s the argument for why a sodium-ion battery would be safer than a lithium-ion battery?
Adrian Yao: This is the one that I also, I’ll put a lot of the biggest asterisk on. It’s certainly, I think this is why the discussion of the chemistries to be become very important because safety is really driven by materials chemistry, the flavor of the bread effectively. So saying kind of a blanket statement that sodium-ion is safer than lithium-ion, I can tell you that is objectively wrong. So we need to be a little bit more nuanced there so we can deep dive into some of those. The chemistries that, for example, phosphate based chemistries similar to lithium-ion LFP is safer than NMC. So NFPP, which is the pyrophosphate version of sodium-ion is safer than NFM, the layered oxide cathode variant for sodium-ion. Some of the other potential safety benefits that sometimes gets under the radar but sometimes sometimes gets more attention than it should maybe is that the transport of batteries could also benefit from some safety benefits of sodium mine.
And that is really because of that earlier point I made just now where the negative electro, the anode can actually use aluminum as a current, I wouldn’t get into the electrochemistry of it, but basically that allows you to ship the cells at zero volts basically completely discharge that really minimizes the risks of thermal runaway happening say on a ship which is really, really dangerous or in the air obviously also dangerous, but this also is somewhat uncertain. If you look at the majority of sodium mine cells being shipped today commercially in China, they’re not actually shipped at zero volts. And so there’s a question of why, and it could have for example, a detriment to maybe the cycle life of the batteries eventually, or maybe that’s just not standard practice. I don’t really know. I don’t know if anyone still has full confidence in the ability to do so, but that is another yet potential benefit on the safety argument.
Shayle Kann: So those are three potential benefits. Let me editorialize for a second and say that in my mind, none of them matter at all. But for the fourth thing, which is cost, right? You can have a supply chain benefit, you can have a great opportunity to do drop in manufacturing, you get a safer battery and it won’t matter a lick in the market if it’s not cost competitive. And so you’ve done a ton of work looking at the current and future cost profile, potential cost profile of sodium-ion batteries. So I want to spend some time on that. Maybe you can start by giving me the two sides of a barbell, which is what do we know about current sodium-ion battery costs today to the extent that they’re being produced. And then at the other end of the barbell, I know you’ve done a bunch of work about what the cost floor could be, what the theoretical cost floor of a sodium-ion battery looks like is. So can you paint me those two pictures to start?
Adrian Yao: Yeah, so I think when we think about costs, we really need to, and in the battery world, of course, dollar per kilowatt hour is the defining kind of metric. That’s the figure of merit, right? I I’d like to break that down into two components is A, to come up with dollar per kilowatt hour, you have a dollar per kg component that is a materials cost component, and then you have a kg per kilowatt hour component, right? That is a metric of materials intensity and multiplying those two together will give you a dollar per kilowatt hour. And I think oftentimes we celebrate the potential for sodium-ion to have a lower materials cost dollar per kilogram because of the stated benefits just now of potentially the supply chain of sodium, sodium carbonate versus lithium carbonate.
We often celebrate that in the same sentence that we also recognize and admit that energy densities could be lower and are always lower because of inherent atomistic properties of sodium versus lithium, but we don’t sometimes put the two and two together at the end of that sentence to recognize that it is very hard for a low energy density system to be competitive on a dollar per kilowatt hour basis because of that math. And so if we look at some of the cell costs today, they are higher sodium, mine costs are higher, and this is attributed to a couple of things. Despite the potential floor of the materials would be low, the cost of materials still needs to come down its own scaling curve. We can model that. We can know potentially when that could happen, but there are also a cell design considerations that really drive cost. If we look at this cost reduction of lithium-ion over the last 30 years, it is really, we can characterize it with a learning rate of maybe like 20, 22% or something like that. It’s very aggressive. It is very spectacular and it’s really a contributor to a lot of the electrification that we see today. How much of that was driven by materials cost coming down versus how much of that was because of improved cell designs? Meaning how we actually assemble and design the sandwich is actually much more the latter.
Shayle Kann: I mean it’s like entirely the latter, right? Because materials, these lithium costs at least have gone, even if you take away the spike, they’re still higher than they were a decade ago.
Adrian Yao: Well, lithium actually is, this is maybe another point that we should clarify. Lithium is only about 7% by mass of lithium-ion cell. It’s really–
Shayle Kann: Right. Cathode materials is what? Yeah.
Adrian Yao: Exactly the cathode materials, right? This is why Elon Musk has said once we should call it a nickel carbon battery as opposed to lithium-ion battery, but whatever we call it, the price of materials has come down, but not as much as it’s not really the main contributor to the price reductions. Basically as we get better at reducing the amount of inactive material used in a battery, basically reducing materials intensity, that has been the primary driver of cost reductions. And if we look at where sodium-ion installs are today, there are still in a regime where electrodes are not as thick as they can be to really minimize costs because that is one of the key drivers to minimize inactive overhead. And yeah, the materials costs can come down, but ultimately it is the denominator of this dollar per kilowatt hour figure that is causing prices to be higher. It’s a fundamental detriment to energy density that hurts it’s competitiveness.
Shayle Kann: So are you able to put some just rough numbers to this barbell then? Like roughly where do we see cell costs today for sodium-ion and then in a future wherein there is significant cell architecture optimization, what can you realistically imagine the cost getting to?
Adrian Yao: Yeah, so current prices for LFP are basically at, I think it was reported to be about $56 per kilowatt hour in the middle of last year. I think that number is down to maybe 40 something sub 50 now. It’s kind of crazy how quickly it’s fallen, how low the price it can be. If I model out the price floor, basically bill of materials only take out manufacturing costs, I can see a world in which we get to 35. I can see a world in which we can be at 35 today, 35 for sodium-ion? No, for lithium-ion the elephant. Oh, for lithium-ion, okay. Yeah, right. For sodium-ion, it’s still my understanding to be above $80 per kilowatt hour for the NFM type chemistries, the layered oxide chemistries. And because of the further energy density penalty that you have with some of the pyrophosphate materials, my understanding is it could be higher than that to put some numbers on.
And really to kind of illustrate this point about the materials cost versus kind of the effective dollar per kilowatt hour that comes out the backend, if we just look at LFP for example, if we assume that it costs say a $3 per kg to make and just the manufacturing cost, that’s basically the CapEx associated with the spray dryers, the furnaces and whatever have you, to make the powder call that $3 per kg. Now with that one kilogram, you can eke out say 500 wat hours or half a kilowatt hour. So that makes it effectively $6 per kilowatt hour for that material. If you take another material, it may be the sodium on variant and you don’t take in an argument that you have better manufacturing costs for example, it is going to still cost you the same to make a material and that’s $3 per kg, but you can only eke out maybe 250 watt hours from it.
So basically a quarter kilowatt hour, that means that that translates to $12 per kilowatt hour, right? So basically even if you add on the LF minerals price, which might be $2 per kg to make this ultimately a material $10 per kilowatt hour, even if your sodium on side were free, your minerals cost were zero, it would still be added price disadvantage. So that really helps illustrate why the materials intensity is so key. And materials intensity again is just basically how many kilowatt hours can you eke out? Well, how many kilograms do you need per kilowatt hour of delivered energy storage?
Shayle Kann: How much of this do you think is just because we’re in the early days of sodium-ion, relatively speaking, right? As you said, a lot of the cost reductions that we’ve seen in lithium-ion and an LFP in particular have come from having improved that exact metric over time. And so are we just at the front end of a curve on sodium-ion that’s going to look similar. I have separate questions about whether translating a theoretical cost curve to reality based on the realities of the market and the capital investment required and the market demand for the early premium products and all that kind of stuff. But setting that aside for a second, if we invested to scale up manufacturing of sodium-ion, are we likely to see a similar cost trajectory, a similar learning rate to what we’ve seen with lithium-ion and ultimately a lower cost floor in the end of time?
Adrian Yao: So my answer is no, it’s not about scale. It’s not about just taking the chemistries in sodium mine today and then scaling the hell out of it because kind of coming back to the example just now, that’s assuming we can make a new sodium mine material today or just any other material today at the same costs. Basically there’s going to be an overhead of manufacturing costs for a given material. So regardless of what that is, and that’s assuming all the scale that has gone into and the learnings that we’ve gone into establishing experience for a material like LFP, what drives the cost at the end is the materials intensity. So where do we need to then invest we, should we invest on scaling or should we invest on increasing energy density? And I would say it’s the latter. It’s really about how can we engineer these both materials and cells to have higher energy density.
And so that is somewhat of maybe a positive light on this in that as a sodium on developer, you don’t necessarily need to have and battle this chicken and egg problem of I need to scale to get to low cost and therefore low cost and get me to scale and that kind of circular thing. I think we can actually get to low cost if we focus on getting the energy densities higher. But that becomes inherently a engineering problem on the cell side, which we can push but still needs to be supported unfortunately by r and d breakthroughs on the material side. And that’s kind of the takeaway here is that just focusing on scale won’t get us there.
Shayle Kann: I realized we didn’t finish the other end of the barbell, right? So you said that current sodium-ion cell costs might be 85 bucks a kilowatt hour. You said the current LFP sell prices are like sub $50 a kilowatt hour and you can see how the cost can be in the thirties today you did a bunch of modeling to project out what the theoretical long-term cost of sodium-ion could be. I think assuming some of these cell architecture improvements that you’re describing here,
Adrian Yao: Both cell and materials,
Shayle Kann: Cell and materials, but what is the floor? Where do you think it could get to say we solve those problems?
Adrian Yao: So this is where it becomes important to pull out what are those roadmaps? So the work that you’re talking about is in the work that we talked about in our recently published nature energy paper where we identify and roadmap what some of these directions could be. And these directions include both cell engineering side improvements. That means for example, increasing the thickness of the bread of your sandwiches to get to higher energy density and therefore reduce costs. That is a very known and very mature strategy that lithium-ion has benefited from. There’s also the other side of basically where can materials go? How much can we develop these materials to improve their ability to store sodium and release sodium? And so some of those routes are, and so basically this can include for example, developing new cathode materials that have a lot more capacity developing anode materials that can have a lot more capacity combining them or in some cases even foregoing for example, the anode material altogether and opt for more of say an anode free direction similar to the lithium anode free direction that people are taking a lithium where you basically plate the ion as a metal on the opposite side, on the negative side to really drive up energy densities.
And so basically if you look at all these combinations and anode free sodium mine cell is one of the most competitive technologies prices out there because you don’t have a negative electrode material that adds to cost as well as the ability to really increase energy density. Those numbers can get to potentially break the line where LFP sits and get to something that’s more competitive, basically 40 or $50 per kilowatt hour. However, that is all dependent on the cathode or sorry, it’s all dependent on the materials developments that we make in enabling this anode free operation as well as for example, significant increases to the capacity of the cathode.
Shayle Kann: I mean, not to be overly negative about it, but just to parrot back, what I feel like I’m hearing from you is, alright, we need materials breakthroughs, we need cell architecture breakthroughs, we got to do a ton of r and d on this, and if we’re successful in doing all of that, the promise at the end of the day is that in some future state, let’s call this a decade away, we might be able to get sodium-ion prices to roughly where LFP prices are today. That assumes no further cost reductions in LFP by the way. And in fact, what really, and when I’ve talked to a lot of people in sodium-ion world, a lot of what they’re banking on is materials costs for lithium-ion going back up again. If lithium prices spike again, this equation changes. So you got to kind of believe something about what’s going to happen to what lithium-ion materials prices in order to get really excited about this because otherwise you’re just saying all this work, all this effort and a decade and we get in 10 years to where lithium-ion already is. Is that an accurate way to think about it in your mind?
Adrian Yao: I think there are a couple ways to look at the cost side, but the first on the outlook side, I think either we make some major breakthroughs in r and d to enable higher energy densities and therefore lower costs or we believe something will break in the lithium-ion supply chain and that increasingly could also be the case, right? I mean again, coming back to graphite where the majority of the graphite in the world that comes out of China and is used already, export controls are just placed on it a couple months ago. It could could cause domestically made lithium-ion to see a spike in prices and whether sodium-ion can compete with that or leverage that opportunity to break the LFP price curve is a true opportunity. We actually model this and show that that can actually accelerate the point at which sodium mine becomes competitive.
But again, that is to your point, lifting of or causing a kink in the LFP overall learning curve to move up as opposed to a sodium mine curve coming down. Now if we come back to the discussion of cost, I think there’s a couple ways to think about this, right? First we’ve talked about increasing energies to reduce materials intensity that is maybe we’ve beat that to death, but then there are other ways to think about cost, right? Maybe it’s compete less so on cell level CapEx, but maybe focus more on total cost of ownership and that might include potentially reduced systems level CapEx costs because of leveraging the safety argument, assuming it holds or banking on a longer cycle life or calendar life or whatever, to really reduce the overall levelized cost. Third, I would call that the second strategy and maybe the third strategy is to don’t compete on costs, is to find a performance niche that you can actually leverage some unique advantage of sodium-ion. And so I think that’s kind of the outlook here and I think there are different companies in the United States that are looking at each one and kind of banking on one of those three strategies.
Shayle Kann: I guess the other question here is in lithium-ion world, the costs have continued to surprise us to the downside. In other words, it keeps getting cheaper and cheaper than we think it’s going to. We’ve seen this play out in solar and other places as well, and it’s thanks in significant part to what ends up happening in China as China scales up new technology. So maybe that could happen in sodium-ion as well, who knows? But the most interesting thing I think to ask right now is what’s happening in sodium-ion? How much are people manufacturing it? What is going on in China? Because there have been some announcements there. Are we at the front end of a sodium-ion boom in manufacturing and in innovation? Does it feel like that’s coming or is it still kind of a little backwater and there’s just an announcement here or there?
Adrian Yao: Yeah, I mean I think this is kind of hard to speak to, like you said, the reality is that all of this is driven by China and what happens in China can sometimes be opaque. And so this is maybe relying more on what’s anecdotal and a couple of things that I think is interesting here. I mean China’s potential focus or interest in sodium mine, maybe less so of a economic argument, but maybe more geopolitical, right? Because China, despite processing the world’s majority of the world’s lithium into lithium carbonate doesn’t actually have lithium reserves within its borders. I mean that mostly is in Australia and the northern triangle in South America. So arguably the west has a better handle of the source of lithium. And so maybe this is maybe more of a play at that, but I think if we look at who are the actual ones building out sodium-ion in China right now, I think you’ll see a lot of tier twos and tier threes players.
And I think this is very characteristic of China in that there are generally very many players that jump in all at once and there’s a tendency to stockpile and have excess capacity. But I think the ones to watch are really the tier ones. And so that’s basically CATL and BYD. Now, I think definitely Robin Zeng, the chairman and CEO of CATL announced basically last November that he expects sodium-ion to take up to half of LFPs market share. And I think that’s what we really need to watch, is that, can we take that at face value or is it also potentially a negotiating strategy to continue to put price pressures on the lithium feedstock to keep it low? Right? Having sodium-ion as a potential substitute is a way to keep maybe perceived as a way to keep lithium prices low. And so through some anecdotal or grapevine through the grapevine talk, it could perhaps be more of the latter.
If we look at CATLs activities in 2021, they did come out with an announce that they already developed 160 watt-hour per KG, Prussian-blue-based sodium-ion, and this was right before, as you recall, the lithium price spikes and I think they actually managed to weather that storm decently well with longer term contracts. So was that part of the game? I don’t know. But I think having alternatives is really what allows prices to stay low. And so maybe there is an argument to really invest in bringing that supply chain up just so that we have the ability to weather storms in the upstream supply chain.
Shayle Kann: The challenge with that I think is who’s investing in that, right? And what justifies it? So sure, that probably means government invests in it, right? But obviously there needs to be a commercial reason to do so, and
Adrian Yao: It’s tricky. That is a strategy that I think is kind of very characteristic of the difference between what happens in China and what happens in the west in China. They kind of do first then evaluate and then many will die as a result of that. It’s intense and very fierce competition. Whereas in the west, we evaluate a bunch, we maybe do, but then like you said, we recognize that maybe there’s no market driver or there’s no market for it, and then we maybe not do at the end. So yeah, this is part of why it’s hard to understand exactly what is coming out of China and whether sodium-ion has an opportunity to survive only on techno economic principles.
Shayle Kann: Alright, Adrian, this was very useful. I feel like I have a better handle on the world of sodium-ion now, so appreciate the time. As always. Thanks for coming on.
Adrian Yao: Of course, this was fun. Thanks.
Shayle Kann: Adrian Yao is the founder of the STEER program at Stanford and the former co-founder and CTO of EnPower. This show is a production of Latitude Media. You can head over to latitude media.com for links to today’s topic. Latitude is supported by Prelude Ventures, prelude backs, visionaries, accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more@preludeventures.com. This episode was produced by Daniel Woldorff. Mixing and theme song by Sean Marquand. Stephen Lacey is our executive editor. I’m Shayle Kann, and this is Catalyst.
