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CATL, Tesla’s Chinese supplier and also the world’s largest lithium-ion battery (Li-ion) supplier, recently unveiled its plan to release sodium-ion batteries (Na-ion) around July this year. According to Zeng Yuqun, founder and chairman of CATL, the Na-ion batteries will play a “supportive role” in the company’s Li-ion battery development. 

Even though CATL has not specified the details regarding how the new type of batteries will be deployed, if the Chinese battery maker indeed succeeded in commercializing them, it would mark a significant step for both the company and the energy storage industry. 

A better alternative to Li-ion batteries? 

Sodium-ion batteries have recently been touted as one of the possible alternatives to lithium-ion batteries for reasons mainly related to costs and safety. Compared to Li-ion batteries, Na-ion batteries have better thermal stability: they have a wider temperature range and experience no issues with thermal runaway. Also, it is non-flammable. 

Most importantly, sodium is abundant. 2.8% of the planet is made up of the element. In comparison, cobalt, a common cathode material, represents merely 0.0029% of the earth. The share of lithium is only 0.0007%. Therefore, the extraction of lithium and cobalt have posed economic and environmental challenges. The adoption of Na-ion batteries would mean a 10-20% reduction of cost compared to Li-ion batteries. 

For China, the abundance of sodium is also particularly important for geopolitical reasons. 70% of the world’s lithium is concentrated in South America, while 80% of China’s lithium has to be imported. 

CATL’s growing stationary storage business 

Despite the advantages offered by Na-ion batteries, technological barriers still remain to prevent its commercialization on a wide scale, especially its application on electric vehicles. Na-ion batteries only have half of the energy density of Li-ion batteries. Moreover, a Na-ion battery is physically heavier than its lithium counterpart. 

The physical and chemical constraints faced by Na-ion batteries make them unsuitable for portable electronics. However, their cost advantages have made them ideal for stationary energy storage, especially at grid scale. Perhaps that is the application scenario envisioned by CATL, even though its founder declared that the new Na-ion batteries will be costlier than the Li-ion ones. 

Despite CATL’s fame as an EV battery supplier for Tesla, grid-scale storage has been a growing focus for the company as well. Since 2018, CATL has been cooperating with various Chinese state grids on energy storage projects, mainly utilizing CATL’s lithium iron phosphate (LFP) batteries. CATL’s grid-scale solutions have already the encompassed the entire grid system, from supply-side management, electricity transmission and distribution, all the way to demand-side response. 

According to CATL’s data, grid-scale energy storage has become a growing business for the company. In 2016, the revenue from grid-scale storage was approximately CNY 39 million and represented 0.26% of CATL’s total revenues. In 2020, the revenue has increased to CNY 1.9 billion, and its share of total revenues has increased to 3.86%. 

As of 2020, CATL is estimated to have a 12% share of the global grid-scale energy storage market. 

An uncertain future

If CATL commercialized Na-ion batteries, it would join the rank of only a handful of companies which have succeeded in doing so. Prominent players among them include the UK’s Faradion, the French company Tiamat and the Stanford spin-off Natron Energy. Notably, HiNa Battery Technology, a spin-off from the Chinese Academy of Sciences, is so far the only Chinese company that has commercialized Na-ion batteries.

Moreover, as a key Tesla supplier, CATL’s adoption of Na-ion batteries might have implications for Tesla’s own utility-scale storage project as well

 

 Source: BusinessNext, Caifuhao